Vertex Pharmaceuticals (VRTX) Laps the Stock Market: Here's Why

In the latest trading session, Vertex Pharmaceuticals (VRTX) closed at $454.97, marking a +1.42% move from the previous day. This move outpaced the S&P 500's daily gain of 0.54%. Elsewhere, the Dow gained 0.66%, while the tech-heavy Nasdaq added 0.77%.

Coming into today, shares of the drugmaker had lost 7.96% in the past month. In that same time, the Medical sector lost 8.43%, while the S&P 500 lost 4.71%.

Analysts and investors alike will be keeping a close eye on the performance of Vertex Pharmaceuticals in its upcoming earnings disclosure. In that report, analysts expect Vertex Pharmaceuticals to post earnings of $4.43 per share. This would mark year-over-year growth of 9.11%. Our most recent consensus estimate is calling for quarterly revenue of $3.04 billion, up 9.59% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $19.13 per share and revenue of $12.97 billion, which would represent changes of +3.97% and +8.05%, respectively, from the prior year.

Investors should also pay attention to any latest changes in analyst estimates for Vertex Pharmaceuticals. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.01% higher within the past month. Right now, Vertex Pharmaceuticals possesses a Zacks Rank of #3 (Hold).

Looking at its valuation, Vertex Pharmaceuticals is holding a Forward P/E ratio of 23.45. This valuation marks a premium compared to its industry average Forward P/E of 17.97.

We can additionally observe that VRTX currently boasts a PEG ratio of 1.7. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Medical - Biomedical and Genetics stocks are, on average, holding a PEG ratio of 1.46 based on yesterday's closing prices.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This industry, currently bearing a Zacks Industry Rank of 146, finds itself in the bottom 41% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow VRTX in the coming trading sessions, be sure to utilize Zacks.com.

Research Chief Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.

Free: See Our Top Stock And 4 Runners Up

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Vertex Pharmaceuticals Incorporated (VRTX): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research