Vertex Pharmaceuticals Stock Upgraded (VRTX)
NEW YORK (
)
(Nasdaq:
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
Highlights from the ratings report include:
- VRTX's very impressive revenue growth greatly exceeded the industry average of 2.8%. Since the same quarter one year prior, revenues leaped by 759.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- VERTEX PHARMACEUTICALS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, VERTEX PHARMACEUTICALS INC turned its bottom line around by earning $0.04 versus -$3.77 in the prior year. This year, the market expects an improvement in earnings ($3.68 versus $0.04).
- Despite currently having a low debt-to-equity ratio of 0.51, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, VERTEX PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- After a year of stock price fluctuations, the net result is that VRTX's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
Vertex Pharmaceuticals Incorporated engages in the discovery, development, and commercialization of small molecule drugs for the treatment of serious diseases worldwide. Vertex has a market cap of $7.3 billion and is part of the
sector and
industry. Shares are up 15.6% year to date as of the close of trading on Friday.
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