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

Zacks Equity Research

In the latest trading session, Vertex Pharmaceuticals (VRTX) closed at $279.19, marking a -0.32% move from the previous day. This change lagged the S&P 500's 0.06% gain on the day. Meanwhile, the Dow lost 0.15%, and the Nasdaq, a tech-heavy index, added 0.33%.

VRTX will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.13, up 69.05% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.40 billion, up 48.8% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.91 per share and revenue of $5.71 billion, which would represent changes of +67.17% and +37.08%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for VRTX. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. VRTX is currently a Zacks Rank #1 (Strong Buy).

Valuation is also important, so investors should note that VRTX has a Forward P/E ratio of 31.44 right now. For comparison, its industry has an average Forward P/E of 26.73, which means VRTX is trading at a premium to the group.

We can also see that VRTX currently has a PEG ratio of 1.11. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Medical - Biomedical and Genetics stocks are, on average, holding a PEG ratio of 1.97 based on yesterday's closing prices.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This group has a Zacks Industry Rank of 44, putting it in the top 18% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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