Vertex Pharmaceuticals (NASDAQ: VRTX) is one of 285 public companies in the “Bio Therapeutic Drugs” industry, but how does it compare to its rivals? We will compare Vertex Pharmaceuticals to similar businesses based on the strength of its earnings, institutional ownership, profitability, risk, analyst recommendations, dividends and valuation.

Profitability

This table compares Vertex Pharmaceuticals and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vertex Pharmaceuticals 8.53% 9.23% 5.01%
Vertex Pharmaceuticals Competitors -5,297.45% -431.37% -39.69%

Insider & Institutional Ownership

93.3% of Vertex Pharmaceuticals shares are held by institutional investors. Comparatively, 50.2% of shares of all “Bio Therapeutic Drugs” companies are held by institutional investors. 1.8% of Vertex Pharmaceuticals shares are held by insiders. Comparatively, 16.6% of shares of all “Bio Therapeutic Drugs” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Vertex Pharmaceuticals has a beta of 1.63, meaning that its share price is 63% more volatile than the S&P 500. Comparatively, Vertex Pharmaceuticals’ rivals have a beta of 2.55, meaning that their average share price is 155% more volatile than the S&P 500.

Earnings & Valuation

This table compares Vertex Pharmaceuticals and its rivals gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Vertex Pharmaceuticals $1.70 billion -$112.05 million 180.50
Vertex Pharmaceuticals Competitors $284.30 million $34.29 million 126.98

Vertex Pharmaceuticals has higher revenue, but lower earnings than its rivals. Vertex Pharmaceuticals is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Vertex Pharmaceuticals and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vertex Pharmaceuticals 0 2 23 0 2.92
Vertex Pharmaceuticals Competitors 837 3186 11555 230 2.71

Vertex Pharmaceuticals currently has a consensus target price of $172.74, suggesting a potential upside of 22.69%. As a group, “Bio Therapeutic Drugs” companies have a potential upside of 44.07%. Given Vertex Pharmaceuticals’ rivals higher probable upside, analysts clearly believe Vertex Pharmaceuticals has less favorable growth aspects than its rivals.

Summary

Vertex Pharmaceuticals beats its rivals on 8 of the 13 factors compared.

About Vertex Pharmaceuticals

Vertex Pharmaceuticals Incorporated is engaged in discovering, developing, manufacturing and commercializing medicines for serious diseases. The Company is focused on developing and commercializing therapies for the treatment of cystic fibrosis (CF) and advancing its research and development programs in other indications. The Company’s marketed medicines are ORKAMBI and KALYDECO. ORKAMBI (lumacaftor in combination with ivacaftor) is approved as a treatment for patients having two copies (homozygous) of the Delta-F508 (F508del) mutation in their cystic fibrosis transmembrane conductance regulator (CFTR) gene. KALYDECO (ivacaftor) is approved for the treatment of CF patients having the G551D mutation or other specified mutations in their CFTR gene. The Company’s development programs in the field of CF include Tezacaftor (VX-661), VX-152, VX-440, VX-659, VX-445 and VX-371. VX-152, VX-440, VX-659 and VX-445 are CFTR corrector compounds.

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