VRTX
Vertex Pharmaceuticals · Health Care · Biotechnology
$507.00
52w 402.58 – 560.25
20y monthly, adjusted
Mkt cap
$128.5B
P/E
32.3
P/FCF
39.9
FCF yield
2.5%
ROE
21.2%
Shldr yield
1.6%
div 0.0% + bb 1.6%
What today's price assumes
At $128.5B, the market is pricing in 17.1% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last five years, FCF actually grew 1.3% per year — the price asks for acceleration beyond the historical record.
Simple DCF per-share range: $158 · $158 · $196 (4% / base / optimistic growth). An estimate, not a target.
Historical multiple lens
At its own median P/OCF of 36.0× across 11 years, VRTX would trade near $516/share (25th–75th percentile: $400–$637); it trades at 35.4× today.
Assumes the historical multiple regime persists — re-ratings can be permanent.
Growth record
Compound annual growth rates from as-filed 10-K data, split-adjusted
Rev 3y
+10.4%
Rev 5y
+14.1%
Rev 10y
+27.8%
EPS 5y
+8.3%
EPS 10y
—
FCF 5y
+1.3%
FCF 10y
—
Fundamentals
Fiscal 2008–2025, from SEC filings
Revenue
Net income
Free cash flow
Diluted shares (lower is better)
Margins
Capital returned (dividends + buybacks)
Cash vs long-term debt
Quarterly
Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.
Revenue by quarter
Net income by quarter
| Quarter | Revenue | YoY | Net income | YoY | EPS | OCF |
|---|---|---|---|---|---|---|
| Q2'26 | $3.3B | +12.5% | $1.1B | +6.5% | 4.31 | $1.1B |
| Q1'26 | $3.0B | +7.8% | $1.0B | +59.6% | 4.02 | $1.4B |
| Q4'25 * | $3.2B | +9.5% | $1.2B | +30.5% | 4.64 | $498.0M |
| Q3'25 | $3.1B | +11.0% | $1.1B | +3.6% | 4.20 | $1.2B |
| Q2'25 | $3.0B | +12.1% | $1.0B | — | 3.99 | $1.1B |
| Q1'25 | $2.8B | +3.0% | $646.3M | −41.2% | 2.49 | $818.9M |
| Q4'24 * | $2.9B | +15.7% | $913.0M | −5.8% | 3.62 | $584.6M |
| Q3'24 | $2.8B | +11.6% | $1.0B | +1.0% | 4.01 | $1.4B |
| Q2'24 | $2.6B | +6.1% | −$3.6B | −492.4% | -13.92 | −$3.8B |
| Q1'24 | $2.7B | +13.3% | $1.1B | +57.1% | 4.21 | $1.3B |
| Q4'23 * | $2.5B | +9.3% | $968.8M | +18.3% | 3.71 | $234.6M |
| Q3'23 | $2.5B | +6.4% | $1.0B | +11.3% | 3.97 | $1.3B |
| Q2'23 | $2.5B | +13.5% | $915.7M | +13.0% | 3.52 | $1.1B |
Track record
Compound annual growth by period. For debt and share count, negative is the good direction.
| Series | 3y | 5y | 10y | 15y |
|---|---|---|---|---|
| Revenue | +10.4% | +14.1% | +27.8% | +34.3% |
| Operating cash flow | −4.2% | +2.2% | +22.2% | — |
| Free cash flow | −6.6% | +1.3% | +23.9% | — |
| EPS (diluted) | +6.1% | +8.3% | +39.8% | — |
| Equity | +10.3% | +16.5% | +34.8% | +27.2% |
| LT debt | — | — | — | — |
| Diluted shares | −0.1% | −0.4% | +0.7% | +1.7% |
| Stock price | +11.9% | +22.3% | +20.9% | +18.5% |
$100, 3 years ago
$140vs $192 in SPY
11.9% vs 24.4%/yr
$100, 5 years ago
$274vs $181 in SPY
22.3% vs 12.6%/yr
$100, 10 years ago
$668vs $428 in SPY
20.9% vs 15.6%/yr
$100, 15 years ago
$1,281vs $803 in SPY
18.5% vs 14.9%/yr
The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)
Last 5 years
$4.79
$60.9B created / $12.7B retained
Last 10 years
$5.27
$99.3B created / $18.8B retained
Quality & capital discipline
Cash-based returns and how management deploys capital
Cash ROIC
19.5%
OCF ÷ (equity + debt)
OCF / EV yield
3.0%
MC vs 10× OCF
3.51
≤1 = priced under 10× OCF
Debt / FCF
—
SBC / FCF
21.5%
Owner earnings
$2.5B
OCF − capex − SBC
OE yield
2.0%
Share count 5y
+3.6%
per year; negative = buybacks
Capital intensity
—
net PP&E ÷ revenue
Sales efficiency
$0.06
new PP&E per $1 new revenue, 5y
Growth engine (5y): reinvested 80.9% of operating cash flow at an incremental return of 3.5% — an organically fundable growth rate of about 2.8% per year (growth ≈ reinvestment rate × incremental ROIC).
Checklist
17 of 26 checks pass · 65%. Checks with structurally missing inputs are excluded.
Growth & Consistency
5/7
- pass
Revenue growth
14.1% · 5y CAGR ≥ 5%
- pass
EPS growth
8.3% · 5y CAGR ≥ 5%
- fail
FCF growth
1.3% · 5y CAGR ≥ 5%
- pass
Revenue rises consistently
9 of 9 · up in ≥ 7 of last 10 years
- pass
FCF consistently positive
9 of 10 · positive in ≥ 8 of last 10 years
- pass
Profitable every year
8 of 10 · net income > 0 in ≥ 8 of last 10
- fail
Cash flow keeps up with sales
2.2% vs 14.1% · OCF CAGR ≥ 0.9× revenue CAGR
Profitability
5/6
- pass
Net margin
32.9% · ≥ 8%
- pass
Operating margin
34.8% · ≥ 10%
- na
Gross margin stable or rising
— · no drop > 2 pts over 3y
- pass
Return on equity
21.2% · ≥ 12%
- pass
Cash ROIC
19.5% · ≥ 12%
- pass
FCF margin
26.6% · ≥ 5%
- fail
Earnings back their cash
OCF $3.6B vs NI $4.0B · OCF ≥ net income (latest FY)
Balance Sheet
5/5
- pass
Debt payable from cash flow
no debt · LT debt ≤ 3× FCF
- pass
Cash cushion
— · cash ≥ 50% of LT debt
- pass
Leverage
— · LT debt ≤ 1.5× equity
- pass
Equity positive and compounding
$18.7B · equity > 0 and grew over ~5y
- pass
Interest burden
0% · interest ≤ 15% of operating income
Capital Allocation
2/4
- fail
Share count flat or shrinking
3.6% · ≤ +0.5%/yr over ~5y
- fail
Stock comp restrained
21% · SBC ≤ 15% of FCF
- pass
Distributions funded by FCF
63% · dividends + buybacks ≤ 100% of FCF
- pass
Repurchases are a habit
7 of 10 · buybacks in ≥ 5 of last 10 years
Valuation Discipline
0/4
- fail
FCF yield
2.5% · ≥ 3%
- fail
Earnings multiple
32.3 · P/E ≤ 25
- fail
Price asks less than history delivered
17.1% vs 1.3% · implied FCF growth ≤ historical FCF CAGR
- fail
Shareholder yield
1.6% · dividends + buybacks ≥ 2% of market cap
Red flags
Mechanical checks — a flag is a question to investigate, not a verdict
Shareholder dilution
Diluted share count has grown by more than 2% per year over ~5 years.
Financial data
As filed in 10-Ks; per-share figures split-adjusted. $ in millions.
| FY | Revenue | Gross profit | Op income | Net income | EPS | OCF | CapEx | FCF | Dividends | Buybacks | SBC | Cash | LT debt | Equity | Shares |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 12,001 | — | 4,173 | 3,953 | 15.32 | 3,631 | 438 | 3,194 | — | 2,017 | 686 | 5,085 | — | 18,666 | 258 |
| 2024 | 11,020 | — | -233 | -536 | -2.08 | -493 | 298 | -790 | — | 1,177 | 699 | 4,570 | — | 16,410 | 258 |
| 2023 | 9,869 | — | 3,832 | 3,620 | 13.89 | 3,537 | 200 | 3,337 | — | 428 | 581 | 10,369 | — | 17,580 | 261 |
| 2022 | 8,931 | — | 4,307 | 3,322 | 12.82 | 4,130 | 205 | 3,925 | — | 0 | 491 | 10,504 | — | 13,913 | 259 |
| 2021 | 7,574 | — | 2,782 | 2,342 | 9.01 | 2,644 | 235 | 2,409 | — | 1,425 | 441 | 6,795 | — | 10,100 | 260 |
| 2020 | 6,206 | — | 2,856 | 2,712 | 10.29 | 3,254 | 260 | 2,994 | — | 539 | 430 | 5,988 | — | 8,687 | 263 |
| 2019 | 4,163 | — | 1,198 | 1,177 | 4.51 | 1,569 | 75 | 1,494 | — | 186 | 361 | 3,109 | — | 6,085 | 261 |
| 2018 | 3,048 | — | 635 | 2,097 | 8.09 | 1,270 | 95 | 1,175 | — | 350 | 325 | 2,650 | — | 4,435 | 259 |
| 2017 | 2,489 | — | 123 | 263 | 1.04 | 845 | 99 | 746 | — | 0 | 293 | 1,665 | — | 2,029 | 253 |
| 2016 | 1,702 | — | 10 | -112 | -0.46 | 236 | 57 | 180 | — | 0 | 241 | 1,184 | — | 1,157 | 245 |
| 2015 | 1,032 | — | -467 | -556 | -2.31 | -365 | 45 | -411 | — | — | 231 | 715 | — | 940 | 241 |
| 2014 | 580 | — | -692 | -739 | -3.14 | -573 | 51 | -624 | — | — | 178 | 625 | — | 1,075 | 235 |
| 2013 | 1,212 | — | -610 | -445 | -1.98 | -61 | 51 | -112 | — | — | 127 | 569 | — | 1,356 | 225 |
| 2012 | 1,527 | — | 47 | -107 | -0.50 | 268 | 71 | 197 | — | — | 114 | 489 | — | 999 | 215 |
| 2011 | 1,411 | — | 114 | 30 | 0.14 | 144 | 35 | 109 | — | — | 118 | 475 | — | 787 | 209 |
| 2010 | 143 | — | -696 | -755 | -3.77 | -635 | 38 | -673 | — | — | 91 | 243 | — | 504 | 200 |
| 2009 | 102 | — | -614 | -642 | -3.71 | -428 | 23 | -451 | — | — | 87 | 447 | — | 1,096 | 173 |
| 2008 | 176 | — | -463 | -460 | -3.27 | -226 | 32 | -259 | — | — | 58 | 389 | — | 239 | 141 |
Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.