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Vertex Pharmaceuticals (VRTX) Outpaces Stock Market Gains: What You Should Know

·3 min read

Vertex Pharmaceuticals (VRTX) closed the most recent trading day at $284.86, moving +1.49% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.34%. Meanwhile, the Dow gained 0.1%, and the Nasdaq, a tech-heavy index, added 0.02%.

Coming into today, shares of the drugmaker had lost 7.37% in the past month. In that same time, the Medical sector lost 5.59%, while the S&P 500 lost 7.95%.

Wall Street will be looking for positivity from Vertex Pharmaceuticals as it approaches its next earnings report date. On that day, Vertex Pharmaceuticals is projected to report earnings of $3.65 per share, which would represent year-over-year growth of 2.53%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.22 billion, up 12.1% from the year-ago period.

VRTX's full-year Zacks Consensus Estimates are calling for earnings of $14.14 per share and revenue of $8.77 billion. These results would represent year-over-year changes of +8.6% and +15.8%, 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. Vertex Pharmaceuticals is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, Vertex Pharmaceuticals is holding a Forward P/E ratio of 19.85. This valuation marks a discount compared to its industry's average Forward P/E of 19.97.

Investors should also note that VRTX has a PEG ratio of 1.78 right now. 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 1.38 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 73, which puts it in the top 29% 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.

To follow VRTX in the coming trading sessions, be sure to utilize Zacks.com.


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