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Vertex Pharmaceuticals (VRTX) Outpaces Stock Market Gains: What You Should Know

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Vertex Pharmaceuticals (VRTX - Free Report) closed at $268.64 in the latest trading session, marking a +0.94% move from the prior day. This change outpaced the S&P 500's 0.81% gain on the day. Meanwhile, the Dow gained 0.3%, and the Nasdaq, a tech-heavy index, added 0.61%.

Heading into today, shares of the drugmaker had gained 11.52% over the past month, outpacing the Medical sector's gain of 6.56% and the S&P 500's gain of 5.64% in that time.

Wall Street will be looking for positivity from Vertex Pharmaceuticals as it approaches its next earnings report date. 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.

For the full year, our Zacks Consensus Estimates are projecting earnings of $14.58 per share and revenue of $8.55 billion, which would represent changes of +11.98% and +12.93%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Vertex Pharmaceuticals. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. The Zacks Consensus EPS estimate has moved 0.51% higher within the past month. Vertex Pharmaceuticals is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, Vertex Pharmaceuticals currently has a Forward P/E ratio of 18.25. This represents a discount compared to its industry's average Forward P/E of 23.76.

Also, we should mention that VRTX has a PEG ratio of 1.17. 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. Medical - Biomedical and Genetics stocks are, on average, holding a PEG ratio of 1.21 based on yesterday's closing prices.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 169, which puts it in the bottom 34% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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