Vertex Pharmaceuticals Incorporated VRTX
Vertex's FY2025 results confirm a strong recovery from the FY2024 profitability anomaly, with revenue of $12.07B, a 39.43% operating margin, and $3.19B in free cash flow, while Q2 2026 revenue topped estimates and management raised the 2026 sales outlook. However, the stock has rallied to $552.06 with an RSI of 71.3, trading at a 40.1% P/E premium and 67.5% EV/EBITDA premium to the healthcare peer median, and the pending ~$10B Crinetics acquisition adds integration risk on top of debt that already expanded from $808M in FY2023 to $3.88B in FY2025.
Persistent net insider selling of approximately $216.6M over 24 months and a Q2 EPS miss further temper enthusiasm at these elevated levels. The diversification story is genuine, but the risk/reward at this valuation and technical extension does not justify an upgrade.
What could go wrong
- Valuation compression. P/E of 31.87 sits 40.1% above the peer median of 22.75, and EV/EBITDA of 24.97 is 67.5% above the peer median of 14.90, leaving little room for execution missteps.
- Crinetics integration and balance sheet strain. The announced ~$10B Crinetics acquisition compounds debt that already rose from $808M in FY2023 to $3.88B in FY2025, increasing financial risk if synergies underwhelm.
- Technical overbought conditions. RSI of 71.3 and a MACD histogram of 4.50 with the stock at $552.06 — well above the 50-day MA of $486.72 — signal stretched momentum vulnerable to a pullback.
- Persistent insider selling. Net insider dispositions of approximately 201,634 shares worth roughly $216.6M over 24 months, with continued EVP-level sales in July 2026, suggest limited insider conviction at current prices.
What would change my mind
Where this comes from: FMP FY2025 annual + derived_metrics · FMP FY2024 annual · FMP FY2023 and FY2025 annual · peer_relative composite. Orin's read on VRTX; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All VRTX filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Capital World Investors | $13.0B | 1.5% of fund |
| Capital Research Global Investors | $9.7B | 1.4% of fund |
| Vanguard Capital Management | $8.2B | 0.2% of fund |
| State Street | $5.9B | 0.2% of fund |
| Invesco | $4.0B | 0.3% of fund |
| Jpmorgan Chase & | $3.3B | 0.2% of fund |
115 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 224 Form 4 filings, net −$216.6M. Of the 50 on hand, 0 were open-market purchases and 39 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about VRTX
Orin answers questions about VRTX from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 29.8× | — | 26.4× |
| EV/EBITDA | 23.3× | 20.7× | — |
| P/S | 10.38× | 9.41× | — |
| P/B | 6.5× | 6.0× | — |
Its P/E sits above all 5 of the last 5 years (+0.54σ from its own mean).
17.5%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $3.2B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$571
$350 – $665 · +10% against today's price
- 47 buy or overweight
- 8 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| VRTXVertex Pharmaceuticals Incorporated | $131B | 29.8× | 23.3× | 86.0% | 34.9% | 23% |
| BMYBristol-Myers Squibb Company | $125B | 13.5× | 9.6× | 70.2% | 18.9% | 47% |
| CVSCVS Health Corporation | $110B | 22.4× | 13.0× | 14.2% | 1.2% | 6% |
| HCAHCA Healthcare, Inc. | $94B | 14.6× | 9.0× | 28.4% | 8.8% | -113% |
| MCKMcKesson Corporation | $103B | 23.5× | 15.3× | 3.6% | 1.1% | -194% |
| MDTMedtronic plc | $114B | 21.8× | 14.9× | 66.7% | 13.9% | 11% |
| REGNRegeneron Pharmaceuticals, Inc. | $83B | 19.1× | 14.3× | 84.9% | 27.9% | 14% |
| SYKStryker Corporation | $105B | 28.1× | 18.6× | 65.2% | 14.4% | 16% |
The median is of the 7 peers listed above and nothing else — check it against the column. This company trades 36.5% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $409 | $436.85 · −6% | 2026-06-10 |
| Levered DCF | $619 | $436.85 · +42% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.