Today's Pre-Market Laggard Is Vertex Pharmaceuticals (VRTX)

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.

Trade-Ideas LLC identified Vertex Pharmaceuticals ( VRTX) as a pre-market laggard 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 $181.4 million.
  • VRTX traded 20,581 shares today in the pre-market hours as of 8:28 AM.
  • VRTX is down 4.2% today from yesterday's close.

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More details on VRTX:

Vertex Pharmaceuticals Incorporated engages in discovering, developing, manufacturing, and commercializing small molecule drugs for patients with serious diseases in specialty markets. Currently there are 8 analysts that rate Vertex Pharmaceuticals a buy, no analysts rate it a sell, and 10 rate it a hold.

The average volume for Vertex Pharmaceuticals has been 1.6 million shares per day over the past 30 days. Vertex has a market cap of $29.8 billion and is part of the health care sector and drugs industry. Shares are up 2.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Vertex Pharmaceuticals as a sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from the ratings report include:
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Biotechnology industry average, but is greater than that of the S&P 500. The net income increased by 14.6% when compared to the same quarter one year prior, going from -$232.46 million to -$198.61 million.
  • VRTX's debt-to-equity ratio of 0.84 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further.
  • VERTEX PHARMACEUTICALS INC has improved earnings per share by 17.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VERTEX PHARMACEUTICALS INC reported poor results of -$3.14 versus -$2.29 in the prior year. This year, the market expects an improvement in earnings (-$1.54 versus -$3.14).
  • The gross profit margin for VERTEX PHARMACEUTICALS INC is currently very high, coming in at 91.11%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -143.38% is in-line with the industry average.

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