Vertex Pharmaceuticals (VRTX)
Health Care · $139B market cap · SEC CIK 0000875320
ahead of 94% of the S&P 500 · #7 of 59 in Health Care
Next reports on Feb 10, 2027, after the close, with analysts expecting $4.20 in earnings per share.
52-week range $406.67 to $568.67. 4% below its 52-week high and 35% above its low.
The case for VRTX
- Generated $3.2B of free cash flow in FY2025, 27% of revenue.
- 31% of revenue drops through to net profit.
- Revenue growing 10.5% year over year.
- Has compounded revenue at 14.1% a year over five years.
- Return on equity of 20%.
- Barely leveraged. Debt is 0.22× equity.
The case against
- Pricey for its growth: 34.8× earnings, where 11% a year of growth would justify about 24×.
- Price/sales of 10.7× is higher than 91% of Health Care companies.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Health Care companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 41 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 67 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 84 |
| Momentumhow the price has behaved lately | 76 |
| Stabilityhow violently it moves, what it owes and what it pays you | 92 |
- Each factor except momentum is half fixed thresholds, half rank among the 59 Health Care companies.
The financials
Revenue growth
Is the business growing? Yes
| Last 12 months | +10.5% |
|---|---|
| Over 5 years | +14.1% a year |
| FY2025 revenue | $12.0B (+9%) |
Free cash flow
Is it generating real cash? Yes, plenty
| FY2025 free cash flow | $3.2B |
|---|---|
| Of revenue | 27% |
| Of profit | 81% |
Profit margins
Is profitability improving? Yes, improving
| Gross margin | 86% |
|---|---|
| Operating margin | 33% |
| Net margin, FY24 → FY25 → now | −4.9% → 32.9% → 30.7% |
Debt vs. cash
Is the balance sheet healthy? Yes, little debt
| Cash | $5.1B |
|---|---|
| Long-term debt | n/a |
| Net cash | n/a |
| Years to repay | n/a |
| Debt / equity | 0.22× |
Valuation
Is the stock price reasonable? No, expensive
| P/E | 34.8× |
|---|---|
| Fair P/E for its growth | 24× |
| P/FCF | 43.4× |
| Forward P/E | 27.2× |
| EV / EBITDA | 30.6× |
At 34.8× earnings it trades above the 24× that 11% a year of growth would justify. At 43.4× free cash flow it trades well above that same mark.
The financials, five years deep
Pulled from Vertex Pharmaceuticals's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $12.0B | $11.0B | $9.9B | $8.9B | $7.6B |
| Change on the year | +9% | +12% | +11% | +18% | — |
| Free cash flow | |||||
| Free cash flow | $3.2B | −$790M | $3.3B | $3.9B | $2.4B |
| Of revenue | 27% | −7% | 34% | 44% | 32% |
| Profit margins | |||||
| Operating margin | 34.8% | −2.1% | 38.8% | 48.2% | 36.7% |
| Net margin | 32.9% | −4.9% | 36.7% | 37.2% | 30.9% |
| Debt vs. cash | |||||
| Cash | $5.1B | $4.6B | $10.4B | $10.5B | $6.8B |
Filings
The text of this 10-K could not be read automatically. The original is linked below.