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Vertex Pharmaceuticals (VRTX) Rises But Trails Market: What Investors Should Know

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Vertex Pharmaceuticals (VRTX - Free Report) closed the latest trading day at $512.52, indicating a +0.06% change from the previous session's end. The stock's change was less than the S&P 500's daily gain of 1.08%. Elsewhere, the Dow saw an upswing of 0.92%, while the tech-heavy Nasdaq appreciated by 1.41%.

Prior to today's trading, shares of the drugmaker had gained 10.85% over the past month. This has outpaced the Medical sector's gain of 0.21% and the S&P 500's loss of 8.26% in that time.

Investors will be eagerly watching for the performance of Vertex Pharmaceuticals in its upcoming earnings disclosure. The company is expected to report EPS of $4.19, down 11.97% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $2.81 billion, indicating a 4.56% upward movement from the same quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $17.65 per share and revenue of $11.85 billion, indicating changes of +4102.38% and +7.56%, respectively, compared to the previous year.

Investors should also note any recent changes to analyst estimates for Vertex Pharmaceuticals. These recent revisions tend to reflect the evolving nature of short-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 demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection has moved 0.19% higher. Right now, Vertex Pharmaceuticals possesses a Zacks Rank of #3 (Hold).

Digging into valuation, Vertex Pharmaceuticals currently has a Forward P/E ratio of 29.02. For comparison, its industry has an average Forward P/E of 19.17, which means Vertex Pharmaceuticals is trading at a premium to the group.

One should further note that VRTX currently holds a PEG ratio of 1.25. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The average PEG ratio for the Medical - Biomedical and Genetics industry stood at 1.55 at the close of the market yesterday.

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 30% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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