Vertex Pharmaceuticals (VRTX) AI Stock Analysis

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Vertex Pharmaceuticals

(NASDAQ:VRTX)

57Neutral

Vertex Pharmaceuticals has strong revenue prospects and successful product launches, driving optimism. However, profitability, cash flow challenges, and technical indicators suggest caution. The negative P/E ratio and lack of dividend yield point to valuation concerns. Overall, while there is potential for growth, current financial and market conditions warrant a cautious outlook.

Positive Factors

Pipeline Expansion

The CF opportunity is considered foundational for pipeline expansion and provides room for share upside.

Product Launch Strategy

Vertex management is actively taking steps to ensure a successful launch for Journavx in the acute pain market by securing broad coverage and ensuring strong physician awareness.

Negative Factors

Earnings Performance

VRTX delivered a rare miss across the board on both revenue and EPS.

Market Access Challenges

The assumption of widespread unrestricted access to Journavx has been challenged, with only 45% of covered lives currently having unrestricted access.

Revenue Impact

Vertex reported 1Q25 results with revenue impacted by intellectual property violations in Russia, which had an estimated $100M impact on revenue.

Vertex Pharmaceuticals (VRTX) vs. S&P 500 (SPY)

Market Cap

$112.83B

Dividend YieldN/A

Average Volume (3M)1.99M

Price to Earnings (P/E)―

Beta (1Y)0.77

Revenue Growth8.55%

EPS Growth-124.45%

CountryUS

Employees6,100

SectorHealthcare

Sector Strength48

IndustryBiotechnology

Share Statistics

EPS (TTM)4.06

Shares Outstanding256,797,180

10 Day Avg. Volume2,556,128

30 Day Avg. Volume1,994,634

Financial Highlights & Ratios

PEG Ratio1.31

Price to Book (P/B)4.77

Price to Sales (P/S)0.00

P/FCF Ratio-138.09

Enterprise Value/Market Cap0.98

Enterprise Value/Revenue2.63

Enterprise Value/Gross Profit11.69

Enterprise Value/Ebitda17.11

Forecast

1Y Price Target

$512.95

Price Target Upside16.75% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering26

Vertex Pharmaceuticals Business Overview & Revenue Model

Company DescriptionVertex Pharmaceuticals (VRTX) is a global biotechnology company headquartered in Boston, Massachusetts. The company is primarily focused on the discovery, development, and commercialization of transformative medicines for serious diseases, with a strong emphasis on cystic fibrosis (CF). Vertex has developed several approved and marketed therapies to treat the underlying cause of CF, which have greatly improved the quality of life for patients with this genetic disease. The company's innovative approach is rooted in small molecule drug discovery and development, targeting diseases where there is a significant unmet need for effective treatment options.

How the Company Makes MoneyVertex Pharmaceuticals generates revenue mainly through the sale of its cystic fibrosis medications, which are its flagship products. The company's CF drugs, such as Trikafta, Symdeko, Orkambi, and Kalydeco, are approved in multiple countries, including the United States and the European Union, and are prescribed to a broad patient population. These drugs address different mutations of the CF gene, expanding the number of patients who can benefit from treatment. Besides direct sales, Vertex also engages in strategic partnerships and collaborations to advance its research and development pipeline. The company invests significantly in R&D to discover and develop new treatments for other diseases, which can potentially lead to new revenue streams in the future. Revenue from licensing agreements and milestone payments from partners also contribute to its earnings, though the majority of its income is derived from its commercialized CF therapies.

Vertex Pharmaceuticals Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Highlights revenue from different business units, shedding light on which segments drive growth and profitability, and indicating strategic focus areas.

Chart InsightsVertex Pharmaceuticals' revenue from Trikafta and Kaftrio continues to drive growth, with a notable increase in 2024. However, legacy products like Kalydeco, Orkambi, and Symdeko have been phased out, reflecting a strategic shift towards newer therapies. The recent earnings call highlights the successful launch of ALYFTREK and JOURNAVX, expected to further boost revenue. Despite challenges with ex-U.S. revenue and increased expenses, Vertex's robust pipeline and raised revenue guidance underscore confidence in sustained growth, supported by significant R&D investments and a strong financial position.

Data provided by:

Main Street Data

Vertex Pharmaceuticals Financial Statement Overview

Summary

Vertex Pharmaceuticals has shown strong revenue growth but faces challenges in profitability and cash flow. The balance sheet remains robust with low leverage, but the recent financial period's negative profitability and cash flow issues are concerns.

Income Statement

Positive

Vertex Pharmaceuticals has shown remarkable revenue growth over the years, with a significant increase from 2019 to 2023. However, the most recent year saw a decline in profitability with a negative EBIT and net income, leading to negative profit margins. This indicates potential operational challenges or increased expenses impacting the bottom line.

Balance Sheet

Positive

The company's balance sheet remains robust with a strong equity base and a low debt-to-equity ratio, indicating financial stability and low leverage. The equity ratio is healthy, suggesting sound asset financing through shareholders’ equity. However, the recent increase in liabilities should be monitored for any potential risks.

Cash Flow

Neutral

Vertex Pharmaceuticals experienced a significant downturn in free cash flow and operating cash flow in the latest year, resulting in negative cash flow figures. This could be a concern if it continues, although historically, the company has maintained strong cash flow generation. The Free Cash Flow to Net Income ratio is negative, reflecting recent profitability challenges.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
11.02B	9.87B	8.93B	7.57B	6.21B
	Gross Profit
9.49B	8.61B	7.85B	6.67B	5.47B
	EBIT
-232.90M	4.31B	4.31B	2.78B	2.86B
	EBITDA
484.90M	4.61B	4.44B	2.92B	3.28B
	Net Income Common Stockholders
-535.60M	3.62B	3.32B	2.34B	2.71B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.12B	11.22B	10.78B	7.52B	6.66B
	Total Assets
22.53B	22.73B	18.15B	13.43B	11.75B
	Total Debt
1.75B	808.40M	561.00M	556.70M	581.48M
	Net Debt
-2.82B	-9.56B	-9.94B	-6.24B	-5.41B
	Total Liabilities
6.12B	5.15B	4.24B	3.33B	3.06B
	Stockholders Equity
16.41B	17.58B	13.91B	10.10B	8.69B
Cash Flow		Free Cash Flow
-790.30M	3.28B	3.93B	2.41B	2.99B
	Operating Cash Flow
-492.60M	3.54B	4.13B	2.64B	3.25B
	Investing Cash Flow
-3.77B	-3.14B	-321.10M	-340.90M	99.39M
	Financing Cash Flow
-1.49B	-562.20M	-67.70M	-1.48B	-505.28M

Vertex Pharmaceuticals Technical Analysis

Technical Analysis Sentiment

Negative

Last Price439.37

Price Trends

50DMA

487.01

Negative

100DMA

464.60

Negative

200DMA

469.88

Negative

Market Momentum

MACD

-14.39

Positive

RSI

32.51

Neutral

STOCH

10.18

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRTX, the sentiment is Negative. The current price of 439.37 is below the 20-day moving average (MA) of 477.13, below the 50-day MA of 487.01, and below the 200-day MA of 469.88, indicating a bearish trend. The MACD of -14.39 indicates Positive momentum. The RSI at 32.51 is Neutral, neither overbought nor oversold. The STOCH value of 10.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VRTX.

Vertex Pharmaceuticals Risk Analysis

Vertex Pharmaceuticals disclosed 48 risk factors in its most recent earnings report. Vertex Pharmaceuticals reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Vertex Pharmaceuticals Peers Comparison

Overall Rating

UnderperformOutperform

Sector (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BMRN	77 Outperform	$11.29B	21.84	9.64%	―	17.99%	152.10%
REGN	75 Outperform	$62.15B	14.65	15.96%	0.15%	7.52%	15.65%
ARGX	69 Neutral	$34.00B	39.57	17.33%	―	78.01%	―
ALNY	62 Neutral	$35.23B	―	-414.62%	―	17.21%	21.16%
BNTX	58 Neutral	$22.30B	―	-3.87%	―	0.58%	-764.64%
VRTX	57 Neutral	$112.83B	―	-5.64%	―	8.55%	-124.45%
Sector *	52 Neutral	$5.21B	3.49	-43.30%	2.83%	14.70%	-0.24%

* Healthcare Sector Average

Performance Comparison

VRTX

Vertex Pharmaceuticals

432.00

3.41

0.80%

ALNY

Alnylam Pharma

266.86

118.97

80.44%

BMRN

BioMarin Pharmaceutical

59.78

-19.87

-24.95%

REGN

Regeneron

574.16

-409.22

-41.61%

ARGX

Argenx Se

542.47

186.46

52.37%

BNTX

BioNTech SE

94.50

2.22

2.41%

Vertex Pharmaceuticals Earnings Call Summary

Earnings Call Date:May 05, 2025

(Q1-2025)

% Change Since: -12.16%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

Vertex Pharmaceuticals demonstrated strong revenue growth and successful product launches in the U.S., but faced challenges with ex-U.S. revenue decline and increased operating expenses. The pipeline is advancing well with multiple programs in pivotal development, although the temporary pause in the VX-522 study represents a setback. Financial guidance for the year was raised, reflecting confidence in continued growth.

Q1-2025 Updates

Positive Updates

Revenue Growth

Vertex Pharmaceuticals reported $2.77 billion in revenue for Q1 2025, representing a 3% growth compared to Q1 2024. U.S. revenue grew by 9% year-over-year.

Product Launches and Approvals

Successful early launches of ALYFTREK and JOURNAVX, with positive feedback from patients and physicians. ALYFTREK approved in the U.S., U.K., and EU, with further approvals expected in Canada, Australia, and Switzerland.

Pipeline Advancements

Four programs in pivotal development are progressing, including Suzetrigine in diabetic peripheral neuropathy and Zimislecel in type 1 diabetes. Enrollment for several programs is on track to complete this year.

R&D and Commercial Expansion

Significant R&D progress with five programs in Phase III and ongoing diversification of the commercial portfolio.

CASGEVY Uptake

Approximately 90 patients have begun the treatment process with CASGEVY, and more than 65 authorized treatment centers have been established globally.

Financial Position

Vertex ended the quarter with $11.4 billion in cash and investments, and increased total revenue guidance for 2025 to $11.85 billion to $12 billion.

Negative Updates

Ex-U.S. Revenue Decline

Ex-U.S. revenue declined by 5% year-over-year, impacted by the availability of an illegal copy product in Russia. The revenue decline in Russia affected total revenue growth.

Temporary Pause in VX-522 Study

A temporary pause was implemented in the Phase I/II study of VX-522 due to a tolerability issue, impacting the program's progress.

Increased Operating Expenses

First quarter 2025 combined non-GAAP R&D, Acquired IPR&D, and SG&A expenses increased by 21% compared to the first quarter of 2024, impacting operating income.

Company Guidance

During the Vertex Pharmaceuticals First Quarter 2025 Earnings Call, the company reported solid financial performance and shared guidance for the year. Vertex achieved $2.77 billion in revenue for the first quarter, marking a 3% increase compared to Q1 2024. The company raised its full-year revenue guidance to a range of $11.85 billion to $12 billion, reflecting an approximate 8% growth at the midpoint. Vertex highlighted the successful U.S. launches of its cystic fibrosis medication, ALYFTREK, and the non-opioid pain treatment, JOURNAVX, which are expected to drive future revenue growth. They also reported progress on their gene-edited therapy, CASGEVY, for sickle cell disease and beta-thalassemia, with 90 patients having their first cell collections. Vertex is focused on advancing its pipeline, with pivotal development programs in diabetic peripheral neuropathy, type 1 diabetes, APOL-1 mediated kidney disease, and IgA nephropathy. The company continues to invest in R&D and commercial capabilities while maintaining a robust financial position with $11.4 billion in cash and investments.

Vertex Pharmaceuticals Corporate Events

Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures

Vertex Pharmaceuticals Announces Key Leadership Changes

Positive

Feb 10, 2025

On February 10, 2025, Vertex Pharmaceuticals announced significant leadership changes with the retirement of Stuart A. Arbuckle as Executive Vice President and COO, effective July 1, 2025. Charles F. Wagner, Jr. will assume the role of COO while retaining his CFO responsibilities, and Duncan J. McKechnie will become Chief Commercial Officer. These changes are aligned with Vertex’s strategic initiatives, including the successful launch of new therapies like ALYFTREK and JOURNAVX, which are expected to drive revenue growth and broaden its therapeutic reach. The company reported strong financial performance for 2024, with a 12% increase in product revenue, primarily driven by its cystic fibrosis portfolio, and provided a positive 2025 outlook with guidance for continued growth and diversification.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.