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Vertex Pharmaceuticals (VRTX) Gains But Lags Market: What You Should Know

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Vertex Pharmaceuticals (VRTX) closed the most recent trading day at $289.60, moving +1.24% from the previous trading session. This move lagged the S&P 500's daily gain of 2.76%. Meanwhile, the Dow gained 2.43%, and the Nasdaq, a tech-heavy index, added 0.13%.

Coming into today, shares of the drugmaker had gained 8.73% in the past month. In that same time, the Medical sector gained 5.69%, while the S&P 500 gained 4.44%.

Vertex Pharmaceuticals will be looking to display strength as it nears its next earnings release, which is expected to be August 4, 2022. In that report, analysts expect Vertex Pharmaceuticals to post earnings of $3.53 per share. This would mark year-over-year growth of 13.5%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.13 billion, up 19% from the year-ago period.

VRTX's full-year Zacks Consensus Estimates are calling for earnings of $14.10 per share and revenue of $8.58 billion. These results would represent year-over-year changes of +8.29% and +13.3%, respectively.

It is also important to note the recent changes to analyst estimates for Vertex Pharmaceuticals. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.32% lower. Vertex Pharmaceuticals is currently a Zacks Rank #4 (Sell).

Digging into valuation, Vertex Pharmaceuticals currently has a Forward P/E ratio of 20.29. For comparison, its industry has an average Forward P/E of 21.99, which means Vertex Pharmaceuticals is trading at a discount to the group.

It is also worth noting that VRTX currently has a PEG ratio of 1.87. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Medical - Biomedical and Genetics industry currently had an average PEG ratio of 1.15 as of yesterday's close.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 80, which puts it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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