High Price-to-Sales Ratio
Strong Gross Profit Margin
Strong Liquidity Ratios
Low Debt Levels
📈 Strong Revenue Growth
🩺 Diverse Product Portfolio
🔒 Strong IP and Market Position
🚀 Expanding Patient Reach
💡 Innovative Pipeline
📊 Positive Market Dynamics
Negative PE and PFCF Ratios
Negative Operating and Net Profit Margins
Poor Return on Equity
Negative Interest Coverage
⚖️ Regulatory Challenges
📉 Potential Cannibalization
Overall, Vertex Pharmaceuticals demonstrates strong business quality through robust revenue growth, a diverse product portfolio, and a solid market position supported by strong IP. Future prospects appear bright with significant expansion potential and a strong pipeline, although challenges related to regulatory issues and potential product cannibalization must be managed.
Analysis Date: February 10, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
VRTX: No Graham value data available
Margin of Safety
Gap between intrinsic value and market price
VRTX: No margin of safety data available
Graham Criteria Checklist
Benjamin Graham's value investing checklist for VRTX
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (-228.18)
P/B ratio ≤ 1.5 (7.45)
Current ratio ≥ 2.0 (2.69x)
Long-term debt < Net current assets (0.27x)
Margin of safety
VRTX does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The gross profit margin of 86.09% indicates a strong capability to generate profit from sales before operating expenses, highlighting operational efficiency.
The negative operating profit margin of -2.24% and net profit margin of -4.87% indicate challenges in managing expenses and generating overall profit.
The return on equity of -3.28% demonstrates that the company is not generating positive returns for its shareholders, which is a concern for investors.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
-3.28%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
4.05%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
86.09%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
-4.87%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
The current ratio of 2.69 and quick ratio of 2.35 indicate that the company has a strong liquidity position, meaning it can easily cover short-term liabilities.
The debt-to-equity ratio of 0.11 and debt-to-assets ratio of 0.08 suggest that the company maintains low leverage, indicating financial stability.
The interest coverage ratio of -8.07 indicates that the company is unable to meet its interest obligations, which poses a significant risk to financial health.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.11x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
2.69x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Vertex Pharmaceuticals achieved $2.91 billion in revenue for Q4 2024, representing a 16% growth year-over-year, and over $11 billion total for the year, marking its 10th consecutive year of double-digit growth.
The company has expanded its offerings with recent approvals such as ALYFTREK and JOURNAVX, diversifying its revenue streams beyond cystic fibrosis (CF) to include treatments for sickle cell disease and acute pain.
Vertex has a robust intellectual property portfolio protecting its CF products, extending into the late 2030s, which strengthens its competitive advantage.
Vertex faces potential revenue impacts from IP violations in certain countries, specifically Russia, which could complicate future market expansion efforts.
Vertex aims to expand its treatment reach significantly, estimating potential to serve an additional 160,000 patients with CF, sickle cell disease, and beta thalassemia, alongside adding 80 million acute pain patients with JOURNAVX.
Vertex has multiple ongoing pivotal studies and a diversified pipeline in diabetes and renal diseases, indicating strong innovation potential and future revenue growth.
There is a significant societal shift towards non-opioid pain management, which bodes well for JOURNAVX as the first new class of pain medicine in over 20 years, addressing a critical market need.
The introduction of ALYFTREK may cannibalize some existing CFTR modulator sales, impacting overall revenue growth from the CF segment.