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Vertex Pharmaceuticals (VRTX) Gains But Lags Market: What You Should Know

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Vertex Pharmaceuticals (VRTX - Free Report) closed the most recent trading day at $248.52, moving +0.62% from the previous trading session. This move lagged the S&P 500's daily gain of 2.24%. Elsewhere, the Dow gained 1.55%, while the tech-heavy Nasdaq added 0.44%.

Prior to today's trading, shares of the drugmaker had gained 5.82% over the past month. This has outpaced the Medical sector's loss of 1.51% and the S&P 500's loss of 4.46% in that time.

Investors will be hoping for strength from Vertex Pharmaceuticals as it approaches its next earnings release. In that report, analysts expect Vertex Pharmaceuticals to post earnings of $3.59 per share. This would mark year-over-year growth of 20.47%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.08 billion, up 20.69% from the year-ago period.

VRTX's full-year Zacks Consensus Estimates are calling for earnings of $14.52 per share and revenue of $8.55 billion. These results would represent year-over-year changes of +11.52% and +12.93%, respectively.

Investors should also note any recent changes to analyst estimates for Vertex Pharmaceuticals. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 2.48% higher. Vertex Pharmaceuticals is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, Vertex Pharmaceuticals currently has a Forward P/E ratio of 17.01. For comparison, its industry has an average Forward P/E of 19.33, which means Vertex Pharmaceuticals is trading at a discount to the group.

We can also see that VRTX currently has a PEG ratio of 1.09. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Medical - Biomedical and Genetics was holding an average PEG ratio of 1.12 at yesterday's closing price.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 154, which puts it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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