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Is Vertex Pharmaceuticals Incorporated (VRTX) Stock Over or Undervalued?

Friday, September 22, 2023 03:18 PM | InvestorsObserver Analysts

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Is Vertex Pharmaceuticals Incorporated (VRTX) Stock Over or Undervalued?

InvestorsObserver gives Vertex Pharmaceuticals Incorporated (VRTX) a weak valuation score of 34 from its analysis. The proprietary scoring system considers the underlying health of a company by analyzing its stock price, earnings, and growth rate. VRTX currently holds a better value than 34% of stocks based on these metrics. Long term investors focused on buying-and-holding should find the valuation ranking system most relevant when making investment decisions.

Valuation Rank - 34
VRTX gets a 34 Valuation Rank today. Find out what this means to you and get the rest of the rankings on VRTX!

Metrics Analysis

VRTX's trailing-12-month Price to Earnings (PE) ratio of 27 puts it above the historical average of roughly 15. VRTX is a poor value at its current trading price as investors are paying more than what its worth in relation to the company's earnings. VRTX's trailing-12-month earnings per share (EPS) of 12.94 does not justify what it is currently trading at in the market. Trailing PE ratios, however, do not factor in a company's projected growth rate, resulting in some firms having high PE ratios due to high growth potentially enticing investors even if current earnings are low.
VRTX has a 12 month forward PE to Growth (PEG) ratio of 2.64. Markets are overvaluing VRTX in relation to its projected growth as its PEG ratio is currently above the fair market value of 1. 12.94's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.


All together these valuation metrics paint a pretty poor picture for VRTX at its current price due to a overvalued PEG ratio despite strong growth. The PE and PEG for VRTX are worse than the average of the market resulting in a valuation score of 34. Click Here to get the full Report on Vertex Pharmaceuticals Incorporated (VRTX) stock.

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