Vertex Pharmaceuticals (VRTX)
Healthcare · NASDAQ · US
Fundamentals
Valuation and ratings
Vertex Pharmaceuticals trades at $486.03, which is 33% below the $648.34 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.
Our moat model scores it 87 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 28.8 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Vertex Pharmaceuticals
Vertex Pharmaceuticals Incorporated operates as a biotechnology company in the United States, Europe, and internationally. The company offers transformative medicines for people with serious diseases with a focus on specialty markets, such as cystic fibrosis (CF), sickle cell disease (SCD), transfusion dependent beta thalassemia (TDT), and acute pain. It markets TRIKAFTA/KAFTRIO for people with CF with at least one F508del mutation for 2 years of age and older; ALYFTREK for the treatment for people with CF 6 years of age and older; SYMDEKO/SYMKEVI for treatment of patients with CF 6 years of age and older; ORKAMBI for CF patients 1 year or older; and KALYDECO for the treatment of patients with 1 month or older who have CF with ivacaftor. The company also develops CASGEVY for the treatment of SCD and TDT; JOURNAVX for the treatment of acute pain in adults; VX-522, a CFTR mRNA therapeutic designed to treat the underlying cause of CF, which is in Phase 1/2 clinical trial; inaxaplin for the treatment of APOL1-mediated kidney disease, which is in single Phase 2 trial; VX-264 for treating Type 1 Diabetes; VX-670 for the treatment of myotonic dystrophy type 1; and VX-407, a small molecule corrector for the treatment of autosomal dominant polycystic kidney disease. The company sells its products primarily to specialty pharmacy and distributors, wholesalers, retail pharmacies, hospitals, and clinics. Vertex Pharmaceuticals Incorporated was founded in 1989 and is headquartered in Boston, Massachusetts.
VRTX passes 6 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
17 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Capital Research Global, Capital Research Global Investors$9.43B · 1.5% of book
- Arrowstreet Capital, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP$285.32M · 0.1% of book
- Renaissance Technologies, RENAISSANCE TECHNOLOGIES LLC$188.30M · 0.3% of book
- Two Sigma, TWO SIGMA INVESTMENTS, LP$168.86M · 0.1% of book
- Ken Griffin, CITADEL ADVISORS LLC$151.51M · 0.0% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Vertex Pharmaceuticals (VRTX) undervalued?
Against our discounted cash flow estimate of $648.34, VRTX at $486.03 is 33% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own VRTX?
17 of the institutions we track reported a position in VRTX in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is VRTX's P/E ratio?
VRTX trades at 28.8 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for VRTX, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.