Vertex, Inc. (VERX)
NASDAQ:VERX
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Vertex
(NASDAQ:VERX)
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Rating:69Neutral
Price Target:
$14.50
▲(17.41% Upside)
Action:Downgraded
Date:06/01/26
The score is driven primarily by strong cash flow and a significantly de-risked balance sheet, reinforced by an earnings call that raised adjusted EBITDA guidance and highlighted cost actions to improve profitability. This is tempered by still-inconsistent GAAP profitability and a neutral technical setup with the stock below longer-term moving averages, while valuation metrics are pressured by a negative P/E and no stated dividend yield.
Positive Factors
Strong cash generation
Vertex's large and growing operating cash flow and materially higher free cash flow provide durable self-funding for investments, product development and buybacks. Consistent cash conversion reduces reliance on external capital and supports resilience through execution cycles and mandate-driven revenue ramps.
Negative Factors
Inconsistent GAAP profitability
Despite revenue scale and solid gross margins, GAAP profitability has swung negative and adjusted EBITDA remains below prior levels. This inconsistency complicates free cash flow outlooks and may constrain returns until restructuring and reinvestment choices sustainably rebase operating margins.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Vertex's large and growing operating cash flow and materially higher free cash flow provide durable self-funding for investments, product development and buybacks. Consistent cash conversion reduces reliance on external capital and supports resilience through execution cycles and mandate-driven revenue ramps.
Read all positive factors
Vertex Key Performance Indicators (KPIs)
Any
Gross Profit by Segment
Shows profitability across different segments, revealing which areas contribute most to the company's bottom line.
Shows profitability across different segments, revealing which areas contribute most to the company's bottom line.
Data provided by:
The Fly
The FlyVertex (VERX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.13B
Dividend YieldN/A
Average Volume (3M)1.59M
Price to Earnings (P/E)―
Beta (1Y)1.10
Revenue Growth11.79%
EPS Growth85.70%
CountryUS
Employees1,900
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.04
Shares Outstanding79,661,290
10 Day Avg. Volume1,658,800
30 Day Avg. Volume1,594,953
Financial Highlights & Ratios
PEG Ratio-3.48
Price to Book (P/B)11.12
Price to Sales (P/S)3.85
P/FCF Ratio41.56
Enterprise Value/Market Cap1.06
Enterprise Value/Revenue2.94
Enterprise Value/Gross Profit4.72
Enterprise Value/Ebitda28.21
Forecast
1Y Price Target
$17.22Price Target Upside39.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
EPS Forecast (FY)0.74
Revenue Forecast (FY)$827.31M
Vertex Business Overview & Revenue Model
Company Description
Vertex, Inc. provides tax technology solutions for corporations in retail, communication, leasing, and manufacturing industries in the United States and internationally. It offers tax determination, compliance and reporting, tax data management, d...
How the Company Makes Money
Vertex makes money primarily by selling software and cloud services that automate and support indirect tax compliance for businesses. Its revenue model is centered on (1) recurring subscriptions for cloud-based tax calculation and compliance produ...
Vertex Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 12, 2026
Earnings Call Sentiment Positive
The call presented a largely positive operational and financial start to the year: the company beat quarterly revenue and adjusted EBITDA guidance, delivered double‑digit ARR growth, improved margins, and achieved Q1 free cash flow positivity. Management announced a deliberate value-creation program (≈9% workforce reduction and third-party spend cuts) that increases near-term charges but is expected to produce $60M–$70M of annualized cash savings beginning in 2027 and has already supported an upward adjustment to full-year adjusted EBITDA guidance. Key growth drivers include cloud and e-invoicing momentum, AI product traction (smart categorization) and the Brinta acquisition for Latin America and AI capability. However, risks and headwinds include a moderated medium‑term revenue growth outlook (low double digits vs prior higher targets), the need for back‑half acceleration in cloud revenue to meet yearly targets, one-time restructuring costs and the timing lag before cost savings are fully realized. Overall, the company is trading faster profitability and cash conversion for near-term restructuring impacts while positioning to monetize e‑invoicing and AI adjacencies over time.Positive Updates
Revenue Beat and YoY Growth
Total revenue of $196.6 million in Q1, up 11.1% year-over-year and above the high end of company guidance.
Negative Updates
Moderation in Revenue Growth Outlook
Management now frames medium-term revenue growth as low double digits (roughly 10%–13%), below prior mid-teens/high‑teens assumptions and a reset from previous 2028 targets.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Beat and YoY Growth
Total revenue of $196.6 million in Q1, up 11.1% year-over-year and above the high end of company guidance.
Read all positive updates
Company Guidance
Management said Q1 results beat expectations with revenue of $196.6M and adjusted EBITDA of $44.1M; Q1 metrics included total revenue +11.1% YoY, subscription +10.9%, services +12.2%, cloud +20.7% (cloud ≈60% of subscription revenue), ARR +11.2%, gross revenue retention 95%, AARPC $140,464 (+11% YoY), scaled customer count +12%, non‑GAAP gross margin +50 bps and adjusted EBITDA +18.4% YoY, with free cash flow of $7.7M. After a ~9% workforce reduction (Q1 pretax severance $6.2M plus ~$2.6M transaction costs), they expect ~$60–$70M of annual cash savings on a fully run‑rate basis starting in 2027 (net of reinvestments). Guidance is Q2 revenue $200–204M and Q2 adjusted EBITDA $47–50M; full‑year revenue unchanged at $823.5–831.5M, full‑year adjusted EBITDA raised to $202–208M (from $188–192M), and full‑year cloud revenue growth targeted at 25%. They repurchased $20M of stock at an average $14.59/share, now expect Investor Day profitability/free‑cash‑flow targets a year earlier (2027), and view medium‑term revenue growth in the low double digits (roughly 10–13%).Vertex Financial Statement Overview
Summary
Income Statement
64
Positive
Balance Sheet
74
Positive
Cash Flow
81
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 768.03M | 748.44M | 666.78M | 572.39M | 491.62M | 425.55M |
| Gross Profit | 478.51M | 454.51M | 426.13M | 348.58M | 298.49M | 263.66M |
| EBITDA | 80.04M | 104.51M | 102.01M | 56.95M | 53.07M | 41.84M |
| Net Income | -6.43M | 7.21M | -52.73M | -13.09M | -12.30M | -1.48M |
Balance Sheet | ||||||
| Total Assets | 1.21B | 1.27B | 1.17B | 759.93M | 719.19M | 670.21M |
| Cash, Cash Equivalents and Short-Term Investments | 252.46M | 314.01M | 305.21M | 77.72M | 102.98M | 73.33M |
| Total Debt | 350.14M | 359.62M | 351.89M | 66.97M | 73.52M | 28.61M |
| Total Liabilities | 967.86M | 1.01B | 987.44M | 506.95M | 489.47M | 440.12M |
| Stockholders Equity | 246.50M | 258.92M | 179.35M | 252.98M | 229.72M | 230.08M |
Cash Flow | ||||||
| Free Cash Flow | 99.19M | 69.31M | 99.05M | 6.10M | 3.43M | 46.92M |
| Operating Cash Flow | 193.04M | 165.54M | 164.82M | 74.33M | 63.85M | 90.29M |
| Investing Cash Flow | -158.18M | -123.75M | -158.15M | -66.17M | -72.05M | -294.78M |
| Financing Cash Flow | -69.78M | -32.78M | 231.26M | -26.48M | 17.09M | -9.10M |
Vertex Technical Analysis
Negative
12.35
Price Trends
12.68
Positive
13.99
Negative
18.23
Negative
Market Momentum
0.11
Positive
49.87
Neutral
23.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VERX, the sentiment is Negative. The current price of 12.35 is below the 20-day moving average (MA) of 13.32, below the 50-day MA of 12.68, and below the 200-day MA of 18.23, indicating a neutral trend. The MACD of 0.11 indicates Positive momentum. The RSI at 49.87 is Neutral, neither overbought nor oversold. The STOCH value of 23.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VERX.
Vertex Risk Analysis
Vertex disclosed 42 risk factors in its most recent earnings report. Vertex reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Vertex Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $2.76B | 14.86 | 18.54% | ― | 15.92% | ― | |
71 Outperform | $1.88B | -49.58 | -8.92% | ― | 15.90% | -91.64% | |
69 Neutral | $2.13B | -358.37 | -2.53% | ― | 11.79% | 85.70% | |
67 Neutral | $1.63B | 122.10 | 1.29% | ― | 9.58% | ― | |
62 Neutral | $4.87B | 55.69 | 5.79% | ― | 20.67% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $2.38B | 72.16 | 4.25% | ― | 28.38% | ― |
* Technology Sector Average
VERX
Vertex
13.16
-27.51
-67.64%
CALX
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37.27
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-22.71%
NCNO
nCino
14.92
-12.24
-45.07%
GBTG
Global Business Travel Group
9.34
2.77
42.16%
INTA
Intapp
24.35
-33.95
-58.23%
FRSH
Freshworks
9.45
-6.50
-40.75%
Vertex Corporate Events
Business Operations and Strategy
Vertex Launches Global Value Creation and AI Initiative
Negative
Apr 28, 2026
On April 28, 2026, Vertex, Inc. announced that its board approved a global Value Creation Plan aimed at becoming a more AI-enabled company, sharpening investment on key growth opportunities and improving operational efficiency. As part of this pla...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.