Vertex Pharmaceuticals Incorporated
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Vertex's FY2025 marked a full profitability recovery from the FY2024 anomaly, with $12.07B in revenue, a 39.4% operating margin, and $3.19B in free cash flow, while Q2 2026 revenue of $3.33B grew 12.5% YoY — confirming the CF franchise retains momentum.
However, VRTX trades at a 24.5% P/E premium and 58.1% EV/EBITDA premium to the healthcare peer median, total debt has ballooned from $808M in FY2023 to $3.88B in FY2025, and net insider selling of approximately $151.6M over 24 months persists. The stock has slipped below its 50-day MA ($522.54 vs. last close $499.74) with a negative MACD histogram, suggesting near-term technical weakness against a still-rich valuation. The risk/reward remains balanced — strong execution is already largely priced in.
What could go wrong
- Valuation compression. P/E of 28.85 vs. peer median 23.17 and EV/EBITDA of 22.26 vs. peer median 14.08 leave little room for execution missteps; any pipeline setback could trigger a de-rating.
- Debt burden from acquisitions. Total debt expanded from $808M in FY2023 to $3.88B in FY2025; if diversification pipeline revenues lag expectations, leverage could constrain buybacks or R&D flexibility.
- CF franchise concentration. Revenue remains dominated by cystic fibrosis therapies; competitive entrants or pricing pressure in CF could undermine the growth narrative.
- Persistent insider selling. Over 24 months, insiders net sold approximately 325,967 shares worth ~$151.6M, with 93 dispositions vs. 4 acquisitions — a pattern that may signal limited insider confidence at current levels.
What would change my mind
Where this comes from: FY25 fundamentals · Q2 2026 results · peer comparison · FY23 and FY25 fundamentals. Orin's read on VRTX; not advice.
How has the share price moved?
Up 24.0% over twelve months, from $420.17 on 27 Oct 2025 to $521.03 at the Tue 27 Oct 2026 close. Its highest close in that time was $557.96 on 3 Sep 2026; the last close is 6.6% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 8.7M, on 26 Jun 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
- Rose flags: large share sales by the company's own officers and directors, from the Form 4 each one files after trading.
On file
All VRTX filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Capital World Investors | $13.0B | 1.5% |
| BlackRock | $12.0B | 0.2% |
| Capital Research Global Investors | $9.7B | 1.4% |
| Vanguard Capital Management | $8.2B | 0.2% |
| State Street | $5.9B | 0.2% |
| Invesco | $4.0B | 0.3% |
| JPMorgan Chase | $3.3B | 0.2% |
| Geode Capital Management | $3.0B | 0.2% |
| Vanguard Portfolio Management | $2.4B | 0.1% |
| Franklin Resources | $1.7B | 0.4% |
118 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 227 Form 4 filings; open-market trades net −$151.6M. Of the 50 on hand, 0 were open-market purchases and 37 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 →How is it priced, against its own past and its sector?
Priced at 30.1× its last 12 months of profit (Tue 27 Oct close) — higher than in all 4 of its last 5 fiscal years with a P/E (middle 26.6×); the typical Healthcare company on the NASDAQ is at 20.8×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 30.1×above usual | 26.6× | 20.8× |
| P/S | 10.5×above usual | 9.41× | — |
| EV/EBITDA | 23.2× | — | — |
| P/B | 6.5×above usual | 6.0× | — |
- EV/EBITDA: no usual level — it ran from 14.5× to 207× over its last 5 fiscal years, so a middle value says little.
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $574 (from $350 to $665) — 10% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$574
$350 – $665 · +10% against the last close
- 21 buy or overweight
- 3 hold
- 1 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 30.1× its last 12 months of profit; the middle P/E of the 7 companies it is compared to that made a profit is 23.0×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| VRTXVertex Pharmaceuticals Incorporated | $132B | 30.1× | 23.2× | 86.0% | 34.9% | 23% |
| BMYBristol-Myers Squibb Company | $126B | 13.6× | 9.5× | 70.2% | 18.9% | 47% |
| CVSCVS Health Corporation | $104B | 9.4× | 8.5× | 14.2% | 2.6% | 14% |
| HCAHCA Healthcare, Inc. | $97B | 54.6× | 9.4× | 21.7% | 8.6% | n/m |
| MCKMcKesson Corporation | $125B | 27.5× | 17.2× | 3.7% | 1.1% | n/m |
| MDTMedtronic plc | $120B | 23.0× | 14.4× | 66.7% | 13.9% | 11% |
| REGNRegeneron Pharmaceuticals, Inc. | $84B | 19.5× | 14.5× | 84.9% | 27.9% | 14% |
| SYKStryker Corporation | $116B | 31.0× | 19.0× | 65.2% | 14.4% | 16% |
- HCA, MCK: return on equity is not meaningful (n/m) — book value is below zero.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 30.1× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now30.1×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Healthcare companies on the NASDAQ were priced at a typical 20.8× their yearly profit (Tue 27 Oct close).
- Now20.8×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $328 a share — 36% below the $516.21 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $328 | 36% below $516.21 |
| Levered | $498 | 4% below $516.21 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.