VERTEX PHARMACEUTICALS INC / MA (VRTX) Stock Analysis
VERTEX PHARMACEUTICALS INC / MA (VRTX) Stock Analysis
Analysis from 10-Q filed 2025-11-04. Data as of Q4 2025.
Overall Grade: F (Concerning)
VERTEX PHARMACEUTICALS INC / MA faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 20.7% | Above industry average |
| FCF Margin | 26.6% | Strong cash generation |
| Debt/Equity | 0.0x | Conservative leverage |
Investment Thesis: Strong return on invested capital of 20.7% suggests durable competitive advantages and efficient capital allocation.
Explore VERTEX PHARMACEUTICALS INC / MA: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: VERTEX PHARMACEUTICALS INC / MA earns 20.7% ROIC, Top 25% in Healthcare
VERTEX PHARMACEUTICALS INC / MA's trailing-twelve-month ROIC of 20.7% ranks Top 25% in Healthcare companies (sector median: -3.9%), driven by NOPAT margin of 29.6% combined with asset turnover of 0.5x. Source: 10-Q filed 2025-11-04. Gross margin of 86.2% with operating margin at 34.8% reflects strong pricing power.
| Metric | VRTX | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 20.7% | Excellent | Above sector median of -3.9% |
| Return on Equity (ROE) | 23.1% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 86.2% | Excellent | Strong pricing power |
| Operating Margin | 34.8% | Excellent | Efficient operations |
Cash Flow: VERTEX PHARMACEUTICALS INC / MA generates $3.2B FCF at 26.6% margin, positive NaN/8 quarters
VERTEX PHARMACEUTICALS INC / MA generated $3.2B in free cash flow (TTM), a 26.6% FCF margin, a margin that ranks Top 5% in Healthcare. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-11-04.
| Metric | VRTX | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 26.6% | Excellent | Excellent cash conversion |
| Free Cash Flow (TTM) | $3.2B | Good | Positive cash generation |
| OCF/Net Income | 0.9x | Good | Potential accrual concerns |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: VERTEX PHARMACEUTICALS INC / MA at 0.0x leverage
VERTEX PHARMACEUTICALS INC / MA's debt-to-equity ratio of 0.0x reflects conservative leverage. Source: 10-Q filed 2025-11-04.
| Metric | VRTX | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.0x | Excellent | Conservative capital structure |
Valuation: VERTEX PHARMACEUTICALS INC / MA trades at 29.3x earnings
VERTEX PHARMACEUTICALS INC / MA trades at a P/E of 29.3x. Free cash flow yield of 2.8% reflects market expectations for growth.
| Metric | VRTX | Rating | Context |
|---|---|---|---|
| P/E Ratio | 29.3x | Adequate | Premium valuation |
| EV/Sales | 9.1x | Adequate | Growth premium priced in |
| FCF Yield | 2.8% | Adequate | Lower cash yield |
Capital Allocation: VERTEX PHARMACEUTICALS INC / MA returns 1.7% shareholder yield
VERTEX PHARMACEUTICALS INC / MA's total shareholder yield is 1.7% (dividends + buybacks 1.7%). Source: 10-Q filed 2025-11-04.
| Metric | VRTX | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 1.7% | Adequate | Dividend + buyback yield combined |
| Buyback Yield | 1.7% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $2.0B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 20.7% | Top 25% | - |
| Free Cash Flow Margin | 26.6% | Top 5% | - |
| Gross Margin | 86.2% | Top 25% | 1.3x above |
| Operating Margin | 34.8% | Top 25% | 18.1x above |
| Return on Equity (ROE) | 23.1% | Top 25% | - |
| P/E Ratio | 29.3x | N/A | - |
Financial Scorecard
| Metric | VRTX | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 20.7% | Excellent | Top 25% of sector (median: -3.9%) |
| Free Cash Flow Margin | 26.6% | Excellent | Top 5% of sector (median: 0.0%) |
| Gross Margin | 86.2% | Excellent | Top 25% of sector (median: 64.0%) |
| Debt to Equity Ratio | 0.0% | Excellent | Conservative capital structure |
| P/E Ratio (Price-to-Earnings) | 29.3x | Adequate | Growth premium |
| Free Cash Flow Yield | 2.8% | Warning | Growth-focused valuation |
Frequently Asked Questions
Q: What is VERTEX PHARMACEUTICALS INC / MA's Return on Invested Capital (ROIC)?
VERTEX PHARMACEUTICALS INC / MA (VRTX) has a trailing twelve-month Return on Invested Capital (ROIC) of 20.7%. This compares above the sector median of -3.9%. An ROIC above 20% indicates exceptional capital efficiency and strong competitive advantages.
Q: What is VERTEX PHARMACEUTICALS INC / MA's Free Cash Flow Margin?
VERTEX PHARMACEUTICALS INC / MA (VRTX) has a free cash flow margin of 26.6%, generating $3.2 billion in free cash flow over the trailing twelve months. A FCF margin above 20% indicates excellent cash conversion and a high-quality business model.
Q: Is VERTEX PHARMACEUTICALS INC / MA stock overvalued or undervalued?
VERTEX PHARMACEUTICALS INC / MA (VRTX) trades at a P/E ratio of 29.3x, which is above the sector median of N/A. The EV/Sales multiple is 9.1x. Free cash flow yield is 2.8%, reflecting growth expectations priced into the stock.
Q: What is VERTEX PHARMACEUTICALS INC / MA's revenue and earnings growth?
VERTEX PHARMACEUTICALS INC / MA (VRTX) grew revenue by 8.9% year-over-year. Modest growth indicates a mature business with stable demand.
Q: Is VERTEX PHARMACEUTICALS INC / MA buying back stock?
VERTEX PHARMACEUTICALS INC / MA (VRTX) repurchased $2.0 billion of stock over the trailing twelve months. This represents a buyback yield of 1.7%.
Q: How does VERTEX PHARMACEUTICALS INC / MA compare to competitors in Healthcare?
Compared to other companies in Healthcare, VERTEX PHARMACEUTICALS INC / MA (VRTX) shows: ROIC of 20.7% is above the sector median of -3.9% (Top 19%). FCF margin of 26.6% exceeds the sector median of 0.0% (Top 0% of sector). Gross margin at 86.2% is 22.3 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Healthcare companies with available SEC filings.
Q: What warning signs should I watch for with VERTEX PHARMACEUTICALS INC / MA?
VERTEX PHARMACEUTICALS INC / MA (VRTX) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-Q filed 2025-11-04. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.