# Vertex Pharmaceuticals (VRTX.US)

Canonical: https://gigainvestors.com/s/VRTX

Analysis as of: 2026-10-16T07:32:56.993Z. Financial observations: FY1996–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $508.75 per share; close as of 2026-10-15.

Estimated value: low $250.59 per share, central $345.12 per share, high $400.17 per share. Buy at or below the central value $345.12 per share. Valuation as of 2026-10-16T07:32:56.993Z; scenarios are not confidence intervals.

Expected annual return: 7.7% at the stated quote. About 7.7% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 0 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 2

- Operating margin variation: 0.69×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.01×

- FY2017: 0.05×

- FY2018: 0.21×

- FY2019: 0.29×

- FY2020: 0.46×

- FY2021: 0.37×

- FY2022: 0.48×

- FY2023: 0.39×

- FY2024: -0.02×

- FY2025: 0.39×

### moat: fail

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 43.6%

- ROIC, second-lowest year: 1.5%

- Typical minus recent gross margin: 2.4 pp

- Typical gross margin (annual median): 87.4%

- Recent gross margin (lower of latest and 3-year median): 85.0%

- Years with nonpositive capital: 0

- Capital spending / revenue: 3.1%

- ROIC including acquisitions, ten-year median: 46.7%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 1.5%

- FY2017: 19.6%

- FY2018: 35.1%

- FY2019: 52.2%

- FY2020: >100%

- FY2021: 93.9%

- FY2022: >100%

- FY2023: 52.1%

- FY2024: -1.4%

- FY2025: 27.3%

### economics: pass

- Owner earnings / net income, 5-yr: 1.00×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $13B

- Net income, five-year total: $13B

- Return on incremental invested capital: 110.2%

- Working capital / revenue, annual change: 1.4 pp

- Working capital / revenue, change between three-year averages: 9.7 pp

- Working capital / revenue, final three-year average: 22.9%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 1.00×

- FY2023: 1.00×

- FY2024: 1.00×

- FY2025: 1.00×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 19.6% vs 27.3%

- Per-share earnings: -0.46 to 13.89 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.7%

- Ordinary dilution, 5-year annual growth: -0.4%

- Market cap gain: $97B

- Cumulative retained earnings: $19B

- Diluted shares, 10-year annual growth: 0.7%

- Diluted shares, 5-year annual growth: -0.4%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: $14.35

- Per-share value, starting three-year median: -$0.46

- Per-share value, ending three-year median: $13.89

- Buybacks concentrated in cheaper years (correlation): -0.12

- Average buyback yield: 1.1%

- Buyback history: 8 years

- Debt-funded buybacks: Yes

- Acquisition spending: $1.9B

- Cumulative net income, 10 years: $19B

- ROIC, first three-year median: 19.6%

- ROIC, last three-year median: 27.3%

Chart: Earnings per share; fiscal year observations.

- FY2016: -$0.46

- FY2017: $1.04

- FY2018: $8.09

- FY2019: $4.51

- FY2020: $10.29

- FY2021: $9.01

- FY2022: $12.82

- FY2023: $13.89

- FY2024: -$2.08

- FY2025: $15.32

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: 1.2%

- Receivables to sales index (DSRI): 1.16×

- Restructuring years, last five: 1

- Stock compensation / operating cash flow: 18.9%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.92×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.08×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -12.0%

- FY2017: -16.4%

- FY2018: 13.2%

- FY2019: -4.7%

- FY2020: -4.6%

- FY2021: -2.2%

- FY2022: -4.5%

- FY2023: 0.4%

- FY2024: -0.2%

- FY2025: 1.2%

## Holders

- [Robert Torray](https://gigainvestors.com/T): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [William Browne](https://gigainvestors.com/TB): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 11.8% a year for ten years · "Strong Core Business, Raised Guidance Push Vertex Pharmaceuticals Higher" (finance.yahoo.com, Sep 2026) · sales +9.6%

Story as of 2026-10-16T09:59:49.428Z; price observation 2026-10-15.

Price needs cash profits to grow 11.8% a year for ten years

- 2025-05-05: Vertex misses quarterly results on weaker-than-expected sales for cystic fibrosis drug ([ca.finance.yahoo.com](https://ca.finance.yahoo.com/news/vertex-misses-quarterly-results-weaker-201759971.html))

- 2025-07-15: Vertex secures NHS England reimbursement deal for Alyftrek cystic fibrosis treatment ([seekingalpha.com](https://seekingalpha.com/news/4467322-vertex-secures-nhs-england-reimbursement-deal-for-alyftrek-cystic-fibrosis-treatment?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2025-08-05: VRTX: Vertex Shares Tank After Pain Drug Flop in Key Trial ([finance.yahoo.com](https://finance.yahoo.com/news/vrtx-vertex-shares-tank-pain-162727736.html))

- 2026-02-13: Vertex outlines 8% to 9% revenue growth for 2026 as non-CF products gain momentum ([seekingalpha.com](https://seekingalpha.com/news/4551664-vertex-outlines-8-percent-to-9-percent-revenue-growth-for-2026-as-non-cf-products-gain?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-05-04: Vertex tops profit estimates as sales of new cystic fibrosis drug surge ([finance.yahoo.com](https://finance.yahoo.com/sectors/healthcare/articles/vertex-tops-profit-estimates-sales-200635156.html))

- 2026-08-03: Vertex raises annual revenue forecast on cystic fibrosis drugs strength ([finance.yahoo.com](https://finance.yahoo.com/healthcare/articles/vertex-raises-annual-revenue-forecast-200555407.html))

### Sales · FY2024–2025

sales +9.6%; source https://www.sec.gov/Archives/edgar/data/875320/000087532026000056/vrtx-20251231.htm; observed 2026-02-13.

- FY2016: $1.7B 

- FY2017: $2.5B 

- FY2018: $3.0B 

- FY2019: $4.2B 

- FY2020: $6.2B 

- FY2021: $7.6B 

- FY2022: $8.9B 

- FY2023: $9.9B 

- FY2024: $11B 

- FY2025: $12B 

### Gross margin · FY2025

gross margin 85%; source https://www.sec.gov/Archives/edgar/data/875320/000087532026000056/vrtx-20251231.htm; observed 2026-02-13.

- FY2016: 87.6% 

- FY2017: 88.9% 

- FY2018: 86.6% 

- FY2019: 86.8% 

- FY2020: 88.1% 

- FY2021: 88.1% 

- FY2022: 87.9% 

- FY2023: 87.2% 

- FY2024: 86.1% 

- FY2025: 85.0% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in biotechnology; annual sales are USD 12.1 billion.

- Source: https://www.sec.gov/Archives/edgar/data/875320/000087532026000056/vrtx-20251231.htm (filed 2026-02-13); FY2025: revenue 12074600000; grossProfit 10267500000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); VRTX.US: Vertex Pharmaceuticals Incorporated operates as a biotechnology company in the United States, Europe, and internationally. The company offers transformative medicines for people with serious diseases with a focus on specialty markets, such as cystic fibrosis (CF), sickle cell disease (SCD), transfusion dependent beta thalassemia (TDT), and acute pain. It markets TRIKAFTA/KAFTRIO for people with CF with at least one F508del mutation for 2 years of age and older; ALYFTREK for the treatment for people with CF 6 years of age and older; SYMDEKO/SYMKEVI for treatment of patients with CF 6 years of age and older; ORKAMBI for CF patients 1 year or older; and KALYDECO for the treatment of patients with 1 month or older who have CF with ivacaftor. The company also develops CASGEVY for the treatment of SCD and TDT; JOURNAVX for the treatment of acute pain in adults; VX-522, a CFTR mRNA therapeutic designed to treat the underlying cause of CF, which is in Phase 1/2 clinical trial; inaxaplin for the treatment of APOL1-mediated kidney disease, which is in single Phase 2 trial; VX-264 for treating Type 1 Diabetes; VX-670 for the treatment of myotonic dystrophy type 1; and VX-407, a small molecule corrector for the treatment of autosomal dominant polycystic kidney disease. In addition, the company also operates as a clinical-stage pharmaceutical company, that focuses on the discovery, development, and commercialization of novel therapeutics for rare endocrine diseases and endocrine-related tumors. The company sells its products primarily to specialty pharmacy and distributors, wholesalers, retail pharmacies, hospitals, and clinics. Vertex Pharmaceuticals Incorporated has a strategic collaboration with AbCellera Biologics Inc. to research, develop, manufacture, and commercialize multispecific T-cell engagers (TCEs) for autoimmune diseases and other conditions. Vertex Pharmaceuticals Incorporated was founded in 1989 and is headquartered in Boston, Massachusetts.

### Why customers stay

Margins ranged from 85% to 87.2% during 2023–25; it earns 43.6% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2023: grossProfit / revenue = 87.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2024: grossProfit / revenue = 86.1%.

- Source: https://www.sec.gov/Archives/edgar/data/875320/000087532026000056/vrtx-20251231.htm (filed 2026-02-13); FY2025: grossProfit / revenue = 85%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); 10-year return on capital observations [[2016,0.015318909762256978],[2017,0.19630933418286078],[2018,0.3513112430106956],[2019,0.5217464480202492],[2020,1.2694233520633256],[2021,0.9394353254082138],[2022,1.147651756450674],[2023,0.5206545680411099],[2024,-0.013818551920549146],[2025,0.2729600908962593]]; median 0.43598290552590274. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 88% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/875320/000087532026000056/vrtx-20251231.htm (filed 2026-02-13); Gross margin observations: [[2021,0.8806242078580482],[2022,0.879035237999261],[2023,0.8721071616747051]]; range within 2 percentage points.

### Where the cash goes

Spends 5.3% of cash earnings on expansion; earns over 100% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2017: growth capex 198024000; upkeep 61397000; owner earnings 263484000. Growth capex / owner earnings = 0.7515598670127978.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2018: growth capex 23104000; upkeep 72420000; owner earnings 2096896000. Growth capex / owner earnings = 0.01101819069710658.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2019: growth capex 0; upkeep 75451000; owner earnings 1208300000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2020: growth capex 150285000; upkeep 109515000; owner earnings 2711700000. Growth capex / owner earnings = 0.05542095364531475.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2021: growth capex 109400000; upkeep 125600000; owner earnings 2342100000. Growth capex / owner earnings = 0.04671021732633107.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2022: growth capex 56400000; upkeep 148300000; owner earnings 3322000000. Growth capex / owner earnings = 0.016977724262492475.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2023: growth capex 77100000; upkeep 181300000; owner earnings 3619600000. Growth capex / owner earnings = 0.021300696209525915.

- Source: https://www.sec.gov/Archives/edgar/data/875320/000087532026000056/vrtx-20251231.htm (filed 2026-02-13); FY2025: growth capex 208399836.0284674; upkeep 229200163.9715326; owner earnings 3933799836.028467. Growth capex / owner earnings = 0.052976725993986055.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); Incremental return on capital 1.1016270231410439, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); Dividend observations: [[2016,0],[2017,0],[2018,20840000],[2019,10046000],[2020,264946000],[2021,102000000],[2022,0],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/875320/000087532026000056/vrtx-20251231.htm (filed 2026-02-13); FY2025: cash repurchases 2017400000 USD.

### Are managers owners

Insiders own 0.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); VRTX.US SharesStats.PercentInsiders = 0.211 percentage points; cache date 2026-10-16.

### What could break it

"Our business is substantially dependent on the success of our CF medicines." (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/875320/000087532026000056/vrtx-20251231.htm (filed 2026-02-13); Our business is substantially dependent on the success of our CF medicines.

### What the price says

The price assumes cash profits grow 11.8% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); Ten-year compound average after fade. Initial solved rate 0.15685514694178793. Price 508.75; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -2.2422175440922953 → FY2025 15.247286186156849. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $75.86 per share

- 2016-11: $81.61 per share

- 2016-12: $73.67 per share

- 2017-01: $85.87 per share

- 2017-02: $90.62 per share

- 2017-03: $109.35 per share

- 2017-04: $118.30 per share

- 2017-05: $123.60 per share

- 2017-06: $128.87 per share

- 2017-07: $151.82 per share

- 2017-08: $160.54 per share

- 2017-09: $152.04 per share

- 2017-10: $146.23 per share

- 2017-11: $144.29 per share

- 2017-12: $149.86 per share

- 2018-01: $166.87 per share

- 2018-02: $166.03 per share

- 2018-03: $162.98 per share

- 2018-04: $153.16 per share

- 2018-05: $154.00 per share

- 2018-06: $169.96 per share

- 2018-07: $175.05 per share

- 2018-08: $184.40 per share

- 2018-09: $192.74 per share

- 2018-10: $169.46 per share

- 2018-11: $180.79 per share

- 2018-12: $165.71 per share

- 2019-01: $190.91 per share

- 2019-02: $188.75 per share

- 2019-03: $183.95 per share

- 2019-04: $168.98 per share

- 2019-05: $166.18 per share

- 2019-06: $183.38 per share

- 2019-07: $166.62 per share

- 2019-08: $180.02 per share

- 2019-09: $169.42 per share

- 2019-10: $195.48 per share

- 2019-11: $221.75 per share

- 2019-12: $218.95 per share

- 2020-01: $227.05 per share

- 2020-02: $224.03 per share

- 2020-03: $237.95 per share

- 2020-04: $251.20 per share

- 2020-05: $287.96 per share

- 2020-06: $290.31 per share

- 2020-07: $272.00 per share

- 2020-08: $279.12 per share

- 2020-09: $272.12 per share

- 2020-10: $208.36 per share

- 2020-11: $227.75 per share

- 2020-12: $236.34 per share

- 2021-01: $229.08 per share

- 2021-02: $212.55 per share

- 2021-03: $214.89 per share

- 2021-04: $218.20 per share

- 2021-05: $208.63 per share

- 2021-06: $201.63 per share

- 2021-07: $201.58 per share

- 2021-08: $200.29 per share

- 2021-09: $181.39 per share

- 2021-10: $184.93 per share

- 2021-11: $186.94 per share

- 2021-12: $219.60 per share

- 2022-01: $243.05 per share

- 2022-02: $230.02 per share

- 2022-03: $260.97 per share

- 2022-04: $273.22 per share

- 2022-05: $268.65 per share

- 2022-06: $281.79 per share

- 2022-07: $280.41 per share

- 2022-08: $281.76 per share

- 2022-09: $289.54 per share

- 2022-10: $312.00 per share

- 2022-11: $316.40 per share

- 2022-12: $288.78 per share

- 2023-01: $323.10 per share

- 2023-02: $290.29 per share

- 2023-03: $315.07 per share

- 2023-04: $340.73 per share

- 2023-05: $323.57 per share

- 2023-06: $351.91 per share

- 2023-07: $352.34 per share

- 2023-08: $348.34 per share

- 2023-09: $347.74 per share

- 2023-10: $362.11 per share

- 2023-11: $354.81 per share

- 2023-12: $406.89 per share

- 2024-01: $433.38 per share

- 2024-02: $420.74 per share

- 2024-03: $418.01 per share

- 2024-04: $392.81 per share

- 2024-05: $455.34 per share

- 2024-06: $468.72 per share

- 2024-07: $495.72 per share

- 2024-08: $495.89 per share

- 2024-09: $465.08 per share

- 2024-10: $475.98 per share

- 2024-11: $468.13 per share

- 2024-12: $402.70 per share

- 2025-01: $461.68 per share

- 2025-02: $479.79 per share

- 2025-03: $484.82 per share

- 2025-04: $509.50 per share

- 2025-05: $442.05 per share

- 2025-06: $445.20 per share

- 2025-07: $456.87 per share

- 2025-08: $391.02 per share

- 2025-09: $391.64 per share

- 2025-10: $425.57 per share

- 2025-11: $433.61 per share

- 2025-12: $453.36 per share

- 2026-01: $469.90 per share

- 2026-02: $496.83 per share

- 2026-03: $446.54 per share

- 2026-04: $427.38 per share

- 2026-05: $447.54 per share

- 2026-06: $496.73 per share

- 2026-07: $477.10 per share

- 2026-08: $544.52 per share

- 2026-09: $522.81 per share

- 2026-10: $485.22 per share

## Annual estimated value (USD per share)

- FY2019: low $37.27 per share, central $47.12 per share, high $52.86 per share

- FY2020: low $117.78 per share, central $157.62 per share, high $180.82 per share

- FY2021: low $150.88 per share, central $203.38 per share, high $233.95 per share

- FY2022: low $215.22 per share, central $289.91 per share, high $333.41 per share

- FY2023: low $231.21 per share, central $312.16 per share, high $359.29 per share

- FY2024: low $209.43 per share, central $255.11 per share, high $293.87 per share

- FY2025: low $231.98 per share, central $320.80 per share, high $372.53 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/875320/000087532026000056/vrtx-20251231.htm); period 2025-12-31, filed 2026-02-13.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.