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

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In the latest trading session, Vertex Pharmaceuticals (VRTX - Free Report) closed at $255.72, marking a +0.7% move from the previous day. This change lagged the S&P 500's 0.71% gain on the day. Meanwhile, the Dow gained 0.27%, and the Nasdaq, a tech-heavy index, added 0.14%.

Prior to today's trading, shares of the drugmaker had gained 10.27% over the past month. This has outpaced the Medical sector's gain of 3.23% and the S&P 500's gain of 3.76% in that time.

Wall Street will be looking for positivity from Vertex Pharmaceuticals as it approaches its next earnings report date. The company is expected to report EPS of $3.59, up 20.47% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.08 billion, up 20.69% from the prior-year quarter.

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 revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.48% higher. Vertex Pharmaceuticals is currently sporting a Zacks Rank of #2 (Buy).

Digging into valuation, Vertex Pharmaceuticals currently has a Forward P/E ratio of 17.49. Its industry sports an average Forward P/E of 22.78, so we one might conclude that Vertex Pharmaceuticals is trading at a discount comparatively.

Meanwhile, VRTX's PEG ratio is currently 1.12. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. VRTX's industry had an average PEG ratio of 1.15 as of yesterday's close.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 161, which puts it in the bottom 37% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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