Vertex Pharmaceuticals (VRTX) shares have climbed 22.3% year-to-date, significantly outpacing the S&P 500 and broader healthcare sector indices. The stock trading near $492.94, close to its 52-week high, suggests strong investor confidence heading into its Q1 earnings report scheduled after markets close on May 5. While analysts expect earnings per share to decline compared to last year, revenue growth expectations remain robust, and the company’s stock continues to perform well ahead of the announcement.
Key Financial Expectations
Analysts project Vertex’s adjusted earnings per share for Q1 2025 to land between $3.69 and $3.75, down from the $4.29-$4.76 range reported in Q1 2024. Despite this expected earnings dip, revenue is forecasted to reach approximately $2.85 billion, supported by the company’s strong cystic fibrosis franchise and newer product launches.
The anticipated drop in earnings per share stems from several factors. Vertex has increased its research and development spending while absorbing upfront costs from recent acquisitions, putting pressure on profit margins. The company is also experiencing a transition period as patients switch from older cystic fibrosis treatments to newer therapies, causing a temporary 10.6% year-over-year decline in sales for some established products.
Additionally, mixed clinical trial results for Suzetrigine, Vertex’s candidate for lumbosacral radiculopathy (back pain), have created some uncertainty. While the drug met its primary endpoint, similar improvements in the placebo group have raised questions about its effectiveness.
Despite near-term earnings pressure, Vertex’s growth outlook remains positive. The company continues to dominate the cystic fibrosis treatment market, and newer launches like ALYFTREK are expected to strengthen this position further. The recent introduction of CASGEVY, a groundbreaking gene therapy, represents another potential growth driver. Management has provided full-year 2025 revenue guidance of $11.75-$12.0 billion, indicating confidence in continued growth throughout the year.
Analysts Maintain Positive Outlook
Analysts following the company generally maintain an optimistic view of Vertex’s prospects. Cantor Fitzgerald recently assumed coverage with an Overweight rating and a price target of $535, highlighting the company’s “dominant” cystic fibrosis franchise that “has again found a way to extend” with Alyftrek. Meanwhile, Morgan Stanley raised its price target to $462 from $459, maintaining an Equal Weight rating.
Vertex Pharmaceuticals is rated a Moderate Buy overall, based on the most recent recommendations of 27 analysts. The average price target for VRTX stock is $502.27, representing a slight upside of 1.99% from current levels.
