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Vertex Pharmaceuticals (VRTX)
NASDAQ:VRTX
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Vertex Pharmaceuticals
(NASDAQ:VRTX)64Neutral
Positive Factors
Earnings
Vertex reported 4Q24 results with revenue of $2.9B, exceeding consensus of $2.78B, and non-GAAP EPS of $3.98, vs. $3.57 consensus.
Product Development
The company is expanding its cystic fibrosis franchise with a new 'Triple CF Super Vanza' pill, which has shown promising data and is entering Phase I trials.
Negative Factors
Product Competition
Journavx, despite its FDA approval, is not expected to be highly competitive due to its slow onset of action.
Vertex Pharmaceuticals (VRTX) vs. S&P 500 (SPY)
Market Cap
$123.21B
Dividend YieldN/A
Average Volume (3M)1.49M
Price to Earnings (P/E)―
Beta (1Y)0.96
Revenue Growth11.64%
EPS Growth-114.72%
CountryUS
Employees6,100
SectorHealthcare
Sector Strength74
IndustryBiotechnology
Share Statistics
EPS (TTM)-2.20
Shares Outstanding256,789,860
10 Day Avg. Volume1,373,961
30 Day Avg. Volume1,487,618
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)11.26
Price to Cash Flow (P/CF)53.10
P/FCF Ratio52.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$497.64Price Target Upside2.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering27
Vertex Pharmaceuticals Business Overview & Revenue Model
Company DescriptionBased in Massachusetts and incorporated in 1989, Vertex Pharmaceuticals, Inc. is a biopharmaceutical company, which is engaged in the development and commercializing therapies for the treatment of cystic fibrosis, infectious diseases including viral infections such as influenza and bacterial infections, autoimmune diseases such as rheumatoid arthritis, cancer, inflammatory bowel disease and neurological disorders including pain and multiple sclerosis.
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 Financial Statement Overview
Summary
Vertex Pharmaceuticals has demonstrated strong revenue growth and a robust balance sheet with low leverage. However, recent financials show concerning signs with negative profitability and cash flow challenges, indicating potential operational inefficiencies and increased expenses.Income Statement
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.63
Positive
Balance Sheet
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.78
Positive
Cash Flow
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.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| 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 |
| 486.30M | 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
Positive
486.22
Price Trends
442.52
Positive
458.27
Positive
466.27
Positive
Market Momentum
9.76
Negative
64.21
Neutral
75.91
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRTX, the sentiment is Positive. The current price of 486.22 is above the 20-day moving average (MA) of 474.23, above the 50-day MA of 442.52, and above the 200-day MA of 466.27, indicating a bullish trend. The MACD of 9.76 indicates Negative momentum. The RSI at 64.21 is Neutral, neither overbought nor oversold. The STOCH value of 75.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $73.85B | 17.62 | 15.03% | 0.13% | 8.27% | 10.35% | |
75 Outperform | $142.89B | 299.97 | 2.48% | 2.65% | 6.16% | -91.54% | |
75 Outperform | $167.71B | 41.29 | 69.59% | 2.94% | 18.64% | -39.39% | |
69 Neutral | $20.57B | 12.67 | 9.76% | ― | -1.60% | 39.71% | |
64 Neutral | $123.21B | ― | -3.26% | ― | 11.64% | -114.72% | |
60 Neutral | $13.48B | 256.93 | 0.95% | ― | 14.76% | -88.32% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
VRTX
Vertex Pharmaceuticals
486.22
74.37
18.06%
AMGN
Amgen
312.19
43.78
16.31%
BIIB
Biogen
142.65
-74.91
-34.43%
GILD
Gilead Sciences
114.74
44.96
64.43%
INCY
Incyte
69.68
10.42
17.58%
REGN
Regeneron
675.49
-295.36
-30.42%
Vertex Pharmaceuticals Earnings Call Summary
Earnings Call Date: Feb 10, 2025 | % Change Since: 3.46% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth and successful product launches, signaling a positive momentum for Vertex's commercial and R&D efforts. However, the call also acknowledged challenges such as IP violations in Russia and increased operating expenses affecting profitability.Highlights
Record Revenue Growth
Vertex Pharmaceuticals reported $2.91 billion in revenue for Q4 2024, marking a 16% increase compared to Q4 2023. Full-year 2024 revenue reached $11.02 billion, a 12% increase over 2023, marking the 10th consecutive year of double-digit growth.
Successful New Product Launches
The company launched ALYFTREK, CASGEVY, and JOURNAVX, with positive feedback from healthcare professionals and patients. JOURNAVX, in particular, was highlighted as the first new class of pain medication in over 20 years.
Strong Pipeline and R&D Progress
Vertex continued to advance its pipeline, including promising developments in CF, type 1 diabetes, renal diseases, and pain management. Notable progress includes pivotal studies for zimislecel, povetacicept, and inaxaplin.
Strategic Leadership Transition
Leadership transitions were announced with confidence in the planned succession, including Charlie Wagner assuming the role of COO and Duncan McKechnie as Chief Commercial Officer.
Lowlights
IP Violation in Russia
Vertex's intellectual property rights are being violated in Russia, affecting ex-U.S. revenue growth, particularly in Q1 2025.
Significant Non-GAAP Operating Income Decline
Full-year 2024 non-GAAP operating income was $696 million, compared to $4.37 billion in 2023, largely due to a $4.4 billion charge for acquired IPR&D from the acquisition of Alpine.
Increased Expenses
Combined non-GAAP R&D and SG&A expenses increased 29% year-over-year in Q4 2024, reflecting investments in the pipeline and commercial launches.
Company Guidance
During the Vertex Pharmaceuticals Fourth Quarter 2024 Earnings Call, the company provided guidance for 2025, projecting total revenue between $11.75 billion and $12 billion, representing approximately 8% growth at the midpoint. The growth is expected to be driven primarily by continued expansion in the cystic fibrosis (CF) portfolio, particularly in the U.S., bolstered by the launch of ALYFTREK, a new CFTR modulator. International CF revenue growth will be impacted by a reduction in one country where intellectual property rights are being violated. The guidance also includes revenue contributions from the ongoing global launch of CASGEVY and the recent U.S. launch of JOURNAVX, with its impact primarily in the latter half of the year. Vertex expects to maintain robust R&D investments, with combined non-GAAP R&D, acquired IPR&D, and SG&A expenses projected at $4.9 billion to $5 billion, reflecting ongoing pivotal studies and commercial launch support. The company also anticipates a non-GAAP effective tax rate between 20.5% and 21.5% for the full year.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.
Product-Related Announcements
Vertex Pharmaceuticals Gains FDA Approval for Cystic Fibrosis Drug
Positive
Dec 20, 2024
The U.S. Food and Drug Administration has approved Vertex Pharmaceuticals’ ALYFTREK™ for treating cystic fibrosis in individuals aged six and older with specific gene mutations. This approval marks a significant advancement for the company, highlighting its role in addressing genetic disorders and potentially expanding its market position in the cystic fibrosis treatment landscape.
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.