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Vertex Pharmaceuticals (VRTX) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 mins read

In the latest trading session, Vertex Pharmaceuticals (VRTX) closed at $270.31, marking a +0.96% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.48%. At the same time, the Dow lost 0.48%, and the tech-heavy Nasdaq lost 0.29%.

Heading into today, shares of the drugmaker had lost 4.08% over the past month, lagging the Medical sector's loss of 1.66% and outpacing the S&P 500's loss of 4.3% in that time.

Wall Street will be looking for positivity from VRTX as it approaches its next earnings report date. In that report, analysts expect VRTX to post earnings of $2.29 per share. This would mark year-over-year growth of 86.18%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.45 billion, up 53.01% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.72 per share and revenue of $5.96 billion. These totals would mark changes of +82.36% and +43.17%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for VRTX. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. VRTX is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, VRTX is holding a Forward P/E ratio of 27.54. This represents a premium compared to its industry's average Forward P/E of 23.77.

Also, we should mention that VRTX has a PEG ratio of 1.39. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. VRTX's industry had an average PEG ratio of 1.54 as of yesterday's close.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This group has a Zacks Industry Rank of 190, putting it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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