Markets

Vertex Pharmaceuticals (VRTX) Gains But Lags Market: What You Should Know

Vertex Pharmaceuticals (VRTX) closed the most recent trading day at $178.98, moving +0.36% from the previous trading session. This change lagged the S&P 500's 1.27% gain on the day. Meanwhile, the Dow gained 1.25%, and the Nasdaq, a tech-heavy index, added 1.48%.

Heading into today, shares of the drugmaker had gained 7.03% over the past month, outpacing the Medical sector's loss of 2.58% and the S&P 500's loss of 4.37% in that time.

Investors will be hoping for strength from VRTX as it approaches its next earnings release. The company is expected to report EPS of $1.12, up 2.75% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $945.82 million, up 20.56% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.58 per share and revenue of $3.71 billion, which would represent changes of +12.25% and +21.69%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for VRTX. Recent revisions tend to reflect the latest near-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 shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 11.07% higher. VRTX is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, VRTX currently has a Forward P/E ratio of 38.93. This represents a premium compared to its industry's average Forward P/E of 27.08.

Investors should also note that VRTX has a PEG ratio of 1.73 right now. 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 1.92 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 82, putting it in the top 33% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many 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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