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

Zacks Equity Research
·3-min read

Vertex Pharmaceuticals (VRTX) closed the most recent trading day at $291.10, moving +1.68% from the previous trading session. This change outpaced the S&P 500's 0.45% gain on the day. Meanwhile, the Dow gained 0.36%, and the Nasdaq, a tech-heavy index, added 0.52%.

Coming into today, shares of the drugmaker had gained 3.35% in the past month. In that same time, the Medical sector lost 0.05%, while the S&P 500 gained 2.08%.

Wall Street will be looking for positivity from VRTX as it approaches its next earnings report date. On that day, VRTX is projected to report earnings of $2.13 per share, which would represent year-over-year growth of 69.05%. Our most recent consensus estimate is calling for quarterly revenue of $1.41 billion, up 49.74% from the year-ago period.

VRTX's full-year Zacks Consensus Estimates are calling for earnings of $8.89 per share and revenue of $5.74 billion. These results would represent year-over-year changes of +66.79% and +37.99%, respectively.

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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. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 has moved 0.32% lower. VRTX is currently a Zacks Rank #3 (Hold).

Looking at its valuation, VRTX is holding a Forward P/E ratio of 32.2. This valuation marks a premium compared to its industry's average Forward P/E of 30.25.

We can also see that VRTX currently has a PEG ratio of 1.14. 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. The Medical - Biomedical and Genetics industry currently had an average PEG ratio of 2.02 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 51, which puts it in the top 21% 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.

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


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Zacks Investment Research