Vertex Pharmaceuticals (VRTX) Hits New Lifetime High Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Vertex Pharmaceuticals ( VRTX) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Vertex Pharmaceuticals as such a stock due to the following factors:

  • VRTX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $223.6 million.
  • VRTX has traded 41,270 shares today.
  • VRTX is trading at a new lifetime high.

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More details on VRTX:

Vertex Pharmaceuticals Incorporated is engaged in discovering, developing, manufacturing, and commercializing small molecule drugs for patients with serious diseases in specialty markets. Currently there are 9 analysts that rate Vertex Pharmaceuticals a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Vertex Pharmaceuticals has been 2.1 million shares per day over the past 30 days. Vertex has a market cap of $24.7 billion and is part of the health care sector and drugs industry. The stock has a beta of -0.56 and a short float of 3% with 3.49 days to cover. Shares are up 40.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Vertex Pharmaceuticals as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income and disappointing return on equity.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, VRTX's share price has jumped by 26.24%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Despite currently having a low debt-to-equity ratio of 0.46, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.58 is very high and demonstrates very strong liquidity.
  • VRTX, with its very weak revenue results, has greatly underperformed against the industry average of 43.1%. Since the same quarter one year prior, revenues plummeted by 55.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • VERTEX PHARMACEUTICALS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, VERTEX PHARMACEUTICALS INC reported poor results of -$2.04 versus -$0.50 in the prior year. For the next year, the market is expecting a contraction of 41.7% in earnings (-$2.89 versus -$2.04).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 178.8% when compared to the same quarter one year ago, falling from -$57.17 million to -$159.38 million.

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