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

Zacks Equity Research
·3 min read

Vertex Pharmaceuticals (VRTX) closed at $234.46 in the latest trading session, marking a -0.59% move from the prior day. This move lagged the S&P 500's daily gain of 0.35%. Meanwhile, the Dow gained 0.23%, and the Nasdaq, a tech-heavy index, added 0.26%.

Prior to today's trading, shares of the drugmaker had gained 8.13% over the past month. This has outpaced the Medical sector's gain of 5.16% and the S&P 500's gain of 3.27% in that time.

VRTX will be looking to display strength as it nears its next earnings release. In that report, analysts expect VRTX to post earnings of $2.61 per share. This would mark year-over-year growth of 53.53%. Our most recent consensus estimate is calling for quarterly revenue of $1.57 billion, up 11.05% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.39 per share and revenue of $6.14 billion. These totals would mark changes of +94.93% and +47.48%, respectively, from last year.

Any recent changes to analyst estimates for VRTX should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. 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.

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 holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, VRTX currently has a Forward P/E ratio of 22.69. This valuation marks a discount compared to its industry's average Forward P/E of 24.51.

Investors should also note that VRTX has a PEG ratio of 1.1 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. The Medical - Biomedical and Genetics industry currently had an average PEG ratio of 1.48 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 208, which puts it in the bottom 19% 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.

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


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Zacks Investment Research