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Vertex Pharmaceuticals (VRTX): Buy, Sell, or Hold Post Q2 Earnings?

By: StockStory

October 08, 2025 at 00:03 AM EDT

VRTX Cover Image

Over the past six months, Vertex Pharmaceuticals’s stock price fell to $413.23. Shareholders have lost 12.5% of their capital, which is disappointing considering the S&P 500 has climbed by 34.7%. This might have investors contemplating their next move.

Following the drawdown, is this a buying opportunity for VRTX? Find out in our full research report, it’s free for active Edge members.

Why Does VRTX Stock Spark Debate?

Founded in 1989 with a mission to create medicines that treat the underlying causes of disease rather than just symptoms, Vertex Pharmaceuticals (NASDAQ: VRTX) develops and markets transformative medicines for serious diseases, with a focus on cystic fibrosis, sickle cell disease, and pain management.

Two Things to Like:

1. Long-Term Revenue Growth Shows Strong Momentum

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Vertex Pharmaceuticals’s sales grew at a solid 16.1% compounded annual growth rate over the last five years. Its growth beat the average healthcare company and shows its offerings resonate with customers.

Vertex Pharmaceuticals Quarterly Revenue

2. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Vertex Pharmaceuticals’s astounding 15.9% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

One Reason to be Careful:

New Investments Fail to Bear Fruit as ROIC Declines

A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity).

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Unfortunately, Vertex Pharmaceuticals’s ROIC has decreased significantly over the last few years. Only time will tell if its new bets can bear fruit and potentially reverse the trend.

Vertex Pharmaceuticals Trailing 12-Month Return On Invested Capital

Final Judgment

Vertex Pharmaceuticals has huge potential even though it has some open questions. With the recent decline, the stock trades at 21.3× forward P/E (or $413.23 per share). Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.

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Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

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