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Boston, Massachusetts-based Vertex Pharmaceuticals Incorporated (VRTX) develops and commercializes therapies for treating cystic fibrosis (CF). Valued at $119.6 billion by market cap, the company invests in scientific innovation to create transformative medicines for people with serious diseases.
Shares of the biotechnology company have outperformed the broader market considerably over the past year. VRTX has gained 32.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 31.8%. However, in 2024, VRTX’s stock rose 14.2%, compared to the SPX’s 25.8% rise on a YTD basis.
Zooming in further, VRTX’s outperformance is also apparent compared to the VanEck Biotech ETF (BBH). The exchange-traded fund has gained about 11.3% over the past year. Moreover, VRTX’s double-digit returns on a YTD basis outshine the ETF’s 1% gain over the same time frame.
VRTX is performing well thanks to the successful commercial launch of Casgevy, a gene-editing therapy for sickle cell disease and beta-thalassemia. The company also has a monopoly in treating the genetic cause of Cystic Fibrosis (CF). The FDA is expected to make a decision on the vanzacaftor triple-drug combo for CF by Jan. 2, 2025, which could be a major success for Vertex. Additionally, Vertex's CF therapy Trikafta/Kaftrio continued strong sales growth has also driven its performance.
On Nov. 4, VRTX shares closed up marginally after reporting its Q3 results. Its adjusted EPS of $4.38 topped Wall Street expectations of $4.13. The company’s revenue was $2.8 billion, beating Wall Street forecasts of $2.7 billion. VRTX expects full-year revenue in the range of $10.8 billion to $10.9 billion.
For the current fiscal year, ending in December, analysts expect VRTX’s loss per share to decline 113.3% to $1.83 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in two of the last four quarters while missing the forecast on two other occasions.
Among the 33 analysts covering VRTX stock, the consensus is a “Moderate Buy.” That’s based on 20 “Strong Buy” ratings, 11 “Holds,” and two “Strong Sells.”
This configuration is more bullish than a month ago, with 19 analysts suggesting a “Strong Buy.”
On Nov. 25, RBC Capital analyst Brian Abrahams maintained a “Hold” rating on VRTX with a price target of $451.
The mean price target of $520.48 represents a 12% premium to VRTX’s current price levels. The Street-high price target of $602 suggests an ambitious upside potential of 29.6%.
