Markets

Vertex Pharmaceuticals (VRTX) Gains As Market Dips: What You Should Know

In the latest trading session, Vertex Pharmaceuticals (VRTX) closed at $220.51, marking a +1.11% move from the previous day. This change outpaced the S&P 500's 1.63% loss on the day. At the same time, the Dow lost 1.44%, and the tech-heavy Nasdaq lost 1.65%.

Prior to today's trading, shares of the drugmaker had lost 19.66% over the past month. This has lagged the Medical sector's gain of 0.14% and the S&P 500's gain of 2.86% in that time.

VRTX will be looking to display strength as it nears its next earnings release. On that day, VRTX is projected to report earnings of $2.35 per share, which would represent year-over-year growth of 91.06%. Meanwhile, our latest consensus estimate is calling for revenue of $1.47 billion, up 54.79% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.85 per share and revenue of $5.99 billion, which would represent changes of +84.8% and +43.91%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for VRTX. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.53% higher. VRTX currently has a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that VRTX has a Forward P/E ratio of 22.14 right now. This represents a discount compared to its industry's average Forward P/E of 24.72.

Also, we should mention that VRTX has a PEG ratio of 1.06. 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 Medical - Biomedical and Genetics was holding an average PEG ratio of 1.62 at yesterday's closing price.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This group has a Zacks Industry Rank of 177, putting it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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