VRTX
VERTEX PHARMACEUTICALS INC / MANasdaqValuation snapshot
Above base casePrice is between the base and bull cases.
Price captured with valuation · Valuation Sep 6, 2026
What drives VRTX's base case?
base-case thesisVertex entered the forecast with Q2 revenue growth of 0.125 and a profitable CF franchise. CASGEVY and JOURNAVX are growing rapidly from small bases, while PALSONIFY and the kidney pipeline create additional sources of sales. The case allows near-term launch and integration spending, followed by gradual efficiency as those products scale.
What shapes the assumptions
Q2 2026 revenue increased 0.125 year over year
Quarterly revenue growth
Raises revenue growth
CASGEVY and JOURNAVX Q2 revenue reached $126.0 million from $42.4 million
Quarterly non-CF product revenue
Raises revenue growth
Q2 2026 GAAP profit from operations was $1.25 billion
Quarterly profit from operations
Raises operating margin
First-half capital expenditure was 0.039 of revenue
First-half capital expenditure divided by revenue
Raises reinvestment
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 12.3% a year. Over the last 5 years it grew 13.5% a year, so the price assumes about what it has delivered.
What else could explain it?›
- Or, holding growth steady
- the price is also consistent with a 46.1% operating margin, against the 40.0% assumed here.
- How confident is this estimate?
- Robustness 48.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Company value drivers
Ranked operating metrics and the valuation assumptions they influence.
1. Second-quarter revenue growth
Measures comparable year-over-year sales momentum and indicates how quickly the explicit revenue forecast should begin.
12.5%
derived3. Second-quarter CASGEVY and JOURNAVX revenue
Tracks whether the two principal non-CF launches are becoming large enough to extend company growth and reduce franchise concentration.
$126M
derived4. Second-quarter GAAP operating margin
Measures how much reported quarterly revenue remains after product, research, launch, and administrative costs.
37.4%
derived5. First-half capital expenditure to revenue
Measures physical investment intensity and helps identify whether manufacturing and infrastructure needs are rising faster than sales.
3.9%
derivedBase inputs from financials
source period →Base revenue (TTM)
$12.6B
Diluted shares
255,200,000
Net cash
—
Bear
low confidence$279.79
IV / share
-48.8% vs $546.12
- Explicit cash flows
- $48.47
- Terminal value
- $231.32
- Net cash
- $0.00
- Intrinsic value / share
- $279.79
82.7% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth7.0% → 6.0% → 5.0% → 4.0% → 3.0%medium
How derived: Starting from 0.125 year-over-year growth in Q2 2026 and management's 2026 revenue guidance, the forecast assumes CF growth slows, new-product adoption remains modest, and the Crinetics portfolio contributes below its stated potential.
Why this confidence: Near-term management guidance and reported product sales ↑, Five-year launch and clinical-development uncertainty ↓
Measured by
- Second-quarter revenue growth12.5%derived
- Second-quarter CF revenue share96.2%derived
- Second-quarter CASGEVY and JOURNAVX revenue$126Mderived
Evidence for
- Vertex expects continued CF growth and at least $500 million of 2026 revenue from CASGEVY and JOURNAVX, supporting continued but moderating growth.[Vertex Q2 2026 results]· primary
Evidence against
- Q2 2026 revenue still depended on CF products for about 0.962 of total revenue, while management warns that new-product commercialization or clinical programs may underperform or fail.[Vertex Q2 2026 Form 10-Q]· primary
Operating margin34.0%medium
How derived: Starting from the reported Q2 2026 margin of 0.374, the case assumes launch spending, acquired-pipeline costs, less favorable product mix, and possible additional ALYFTREK royalties prevent recovery to recent levels.
Why this confidence: Recent GAAP expense and profit disclosures ↑, Uncertain integration and future product mix ↓
Measured by
- Second-quarter CASGEVY and JOURNAVX revenue$126Mderived
- Second-quarter GAAP operating margin37.4%derived
Evidence for
- Q2 2026 selling, general and administrative expense increased 0.37 year over year, and cost of sales rose to 0.147 of product revenue from 0.138.[Vertex Q2 2026 Form 10-Q]· primary
Evidence against
- Vertex produced a Q2 2026 GAAP margin of approximately 0.374 despite substantial spending on launches and late-stage development.[Vertex Q2 2026 Form 10-Q]· primary
Tax rate23.0%medium
How derived: Starting from the 0.210 Q2 2026 effective rate and the 0.194 first-half rate, the case adds a cushion for reduced stock-compensation benefits, geographic-mix changes, and acquisition-related tax complexity.
Why this confidence: Current statutory and reported tax rates ↑, Acquisition, jurisdictional, and tax-credit variability ↓
No tracked driver measures this assumption yet.
Evidence for
- The Q2 2026 effective tax rate reached the 0.210 U.S. statutory rate, above the 0.194 first-half rate.[Vertex Q2 2026 Form 10-Q]· primary
Evidence against
- Vertex's first-half 2026 effective rate was only 0.194 because excess tax benefits from stock-based compensation reduced the rate.[Vertex Q2 2026 Form 10-Q]· primary
Reinvestment rate24.0%low
How derived: Starting from first-half capital expenditure of $245.6 million versus $112.4 million of depreciation and amortization, the case assumes weaker launch productivity and continued manufacturing, working-capital, and pipeline investment consume 0.24 of after-tax operating profit.
Why this confidence: Reported capital expenditure and working-capital movements ↑, R&D is expensed and acquisition spending is irregular ↓
Measured by
- First-half capital expenditure to revenue3.9%derived
Evidence for
- First-half 2026 property and equipment purchases rose to $245.6 million from $186.4 million, and inventories increased by $125.4 million.[Vertex Q2 2026 Form 10-Q]· primary
Evidence against
- First-half 2026 operating cash flow increased to $2.55 billion, showing that the current business funds physical investment without requiring a high share of operating profit.[Vertex Q2 2026 Form 10-Q]· primary
Terminal growth2.0%low
How derived: Starting from a highly profitable but CF-concentrated franchise, the case assumes pipeline attrition and eventual competition limit perpetual nominal growth to approximately the Federal Reserve's long-run inflation objective.
Why this confidence: Broad disclosed development pipeline ↑, Perpetual horizon and drug-development attrition ↓
Measured by
- Second-quarter CF revenue share96.2%derived
Evidence for
- Vertex continues to pursue serial innovation in CF and has commercial or clinical programs in pain, blood disorders, kidney disease, diabetes, endocrine disease, and other areas.[Vertex Q2 2026 results]· primary
Evidence against
- CF products generated $3.21 billion of Q2 2026 revenue versus only $126.0 million from CASGEVY and JOURNAVX combined, leaving substantial long-run concentration risk.[Vertex Q2 2026 Form 10-Q]· primary
Base
low confidence$474.31
IV / share
-13.1% vs $546.12
- Explicit cash flows
- $68.86
- Terminal value
- $405.46
- Net cash
- $0.00
- Intrinsic value / share
- $474.31
85.5% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth11.0% → 10.0% → 9.0% → 8.0% → 7.0%medium
How derived: Starting from 0.125 Q2 2026 growth and 2026 guidance implying approximately 0.096 full-year growth at its midpoint, the forecast assumes steady CF expansion plus scaling contributions from CASGEVY, JOURNAVX, PALSONIFY, and selected pipeline launches.
Why this confidence: Raised guidance and two years of comparable quarterly growth ↑, Material revenue from several products remains unproven ↓
Measured by
- Second-quarter revenue growth12.5%derived
- Second-quarter CF revenue share96.2%derived
- Second-quarter CASGEVY and JOURNAVX revenue$126Mderived
Price implies: 12.3% vs our 9.0% — one of several sets that fit this price
Evidence for
- Vertex raised 2026 revenue guidance to $13.1 billion-$13.2 billion, while CASGEVY and JOURNAVX Q2 revenue grew 1.51 and more than 3.0 year over year, respectively.[Vertex Q2 2026 results]· primary
- The completed Crinetics acquisition added the launched PALSONIFY franchise and late-stage atumelnant program.[Crinetics acquisition completion]· primary
Evidence against
- CASGEVY and JOURNAVX together contributed only $126.0 million in Q2 2026, and management's guidance explicitly warns that commercialization and regulatory outcomes may differ from expectations.[Vertex Q2 2026 results]· primary
Operating margin40.0%medium
How derived: Starting from Q2 2026 and Q2 2025 GAAP margins of 0.374 and 0.388, the case assumes revenue grows faster than mature launch costs after near-term integration spending, lifting the fifth-year margin to 0.400.
Why this confidence: Comparable quarterly GAAP profitability ↑, Crinetics integration and launch-spending uncertainty ↓
Measured by
- Second-quarter CASGEVY and JOURNAVX revenue$126Mderived
- Second-quarter GAAP operating margin37.4%derived
Price implies: 46.1% vs our 40.0% — one of several sets that fit this price
Evidence for
- Vertex generated $1.25 billion of Q2 2026 operating income on $3.33 billion of revenue despite launch investment.[Vertex Q2 2026 Form 10-Q]· primary
- Management expects the Crinetics transaction to become accretive to non-GAAP operating income in 2029.[Crinetics acquisition announcement]· primary
Evidence against
- Q2 2026 costs and expenses increased 0.15 while revenue increased 0.125, reducing the GAAP margin from 0.388 to 0.374.[Vertex Q2 2026 Form 10-Q]· primary
Tax rate21.0%high
How derived: Starting from the 0.210 Q2 2026 statutory-level rate and the 0.194 first-half effective rate, the forecast uses 0.210 as a normalized rate after allowing current stock-compensation benefits to moderate.
Why this confidence: Assumption equals the current U.S. statutory rate and latest quarterly rate ↑, Geographic and stock-compensation variability ↓
No tracked driver measures this assumption yet.
Evidence for
- Vertex reported a Q2 2026 effective tax rate of 0.210, equal to the U.S. statutory rate.[Vertex Q2 2026 Form 10-Q]· primary
Evidence against
- The first-half 2026 effective rate was 0.194, and Vertex states that geographic earnings, tax credits, acquisitions, and stock compensation cause the rate to fluctuate.[Vertex Q2 2026 Form 10-Q]· primary
Reinvestment rate20.0%low
How derived: Starting from first-half capital expenditure exceeding depreciation by $133.2 million, the case assumes continued capacity, inventory, launch, and pipeline investment absorbs 0.20 of after-tax operating profit while the scalable CF franchise funds most growth.
Why this confidence: Current cash-flow, capital-spending, and inventory disclosures ↑, Future working capital and commercialization needs are not guided ↓
Measured by
- First-half capital expenditure to revenue3.9%derived
Evidence for
- First-half 2026 capital expenditure was $245.6 million, depreciation and amortization was $112.4 million, and a dedicated cell-therapy manufacturing facility commenced its lease.[Vertex Q2 2026 Form 10-Q]· primary
Evidence against
- First-half operating cash flow of $2.55 billion substantially exceeded physical capital expenditure, reflecting strong capital efficiency in the marketed portfolio.[Vertex Q2 2026 Form 10-Q]· primary
Terminal growth2.5%low
How derived: Starting from Vertex's durable CF franchise and expanding portfolio, the case assumes mature nominal growth of 0.025 as price, patient longevity, and replacement products modestly outpace inflation without requiring perpetual high growth.
Why this confidence: Established CF franchise and broader commercial portfolio ↑, Perpetual forecast horizon ↓
Measured by
- Second-quarter CF revenue share96.2%derived
Evidence for
- Recent CF label expansions make about 0.95 of people with CF eligible for Vertex modulators, while Crinetics adds a fifth disease pillar.[Vertex Q2 2026 presentation]· primary
Evidence against
- The company states that clinical data may not support registration and that regulatory approvals, launches, and anticipated acquisition benefits may be delayed or fail.[Vertex Q2 2026 results]· primary
Bull
low confidence$707.44
IV / share
+29.5% vs $546.12
- Explicit cash flows
- $87.19
- Terminal value
- $620.25
- Net cash
- $0.00
- Intrinsic value / share
- $707.44
87.7% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth15.0% → 14.0% → 12.0% → 10.0% → 8.0%low
How derived: Starting from 0.125 Q2 2026 growth, the case assumes faster uptake of ALYFTREK, CASGEVY, JOURNAVX, and PALSONIFY plus timely launches from the kidney and endocrine pipeline lift growth before natural maturation.
Why this confidence: Measured early launch acceleration ↑, Requires several commercial and clinical successes at once ↓
Measured by
- Second-quarter revenue growth12.5%derived
- Second-quarter CF revenue share96.2%derived
- Second-quarter CASGEVY and JOURNAVX revenue$126Mderived
Evidence for
- CASGEVY Q2 2026 revenue grew 1.51 year over year, JOURNAVX revenue more than quadrupled, and JOURNAVX filled prescriptions reached approximately 535,000 in the quarter.[Vertex Q2 2026 results]· primary
- Vertex states that PALSONIFY and atumelnant have combined peak annual-revenue potential above $5 billion.[Crinetics acquisition completion]· primary
Evidence against
- The $5 billion Crinetics figure is management's peak-potential estimate rather than reported revenue, and atumelnant remains in clinical development.[Crinetics acquisition completion]· primary
Operating margin44.0%low
How derived: Starting from the 0.374 Q2 2026 GAAP margin and approximately 0.44 full-year 2025 non-GAAP margin, the case assumes strong sales productivity and mature launch infrastructure produce substantial operating leverage.
Why this confidence: Vertex has previously demonstrated comparable adjusted profitability ↑, GAAP profitability is currently below the target ↓
Measured by
- Second-quarter CASGEVY and JOURNAVX revenue$126Mderived
- Second-quarter GAAP operating margin37.4%derived
Evidence for
- Vertex reported a full-year 2025 non-GAAP margin near 0.44 and Q2 2026 GAAP operating income of $1.25 billion.[Vertex FY2025 results]· primary
Evidence against
- Q2 2026 sales and administrative expense grew 0.37 and product cost of sales rose as the product mix diversified.[Vertex Q2 2026 Form 10-Q]· primary
Tax rate19.0%medium
How derived: Starting from the first-half 2026 effective rate of 0.194, the case assumes continued research credits, stock-compensation benefits, and favorable geographic earnings mix keep the normalized rate near 0.190.
Why this confidence: Assumption closely matches the reported first-half rate ↑, Tax benefits may not recur consistently ↓
No tracked driver measures this assumption yet.
Evidence for
- Vertex's first-half 2026 effective tax rate was 0.194, primarily reflecting excess tax benefits related to stock-based compensation.[Vertex Q2 2026 Form 10-Q]· primary
Evidence against
- The Q2 2026 rate was 0.210, and Vertex identifies acquisitions, changing jurisdictional profit, tax law, deductions, and credits as sources of volatility.[Vertex Q2 2026 Form 10-Q]· primary
Reinvestment rate18.0%low
How derived: Starting from first-half capital expenditure equal to 0.039 of revenue and strong operating cash generation, the case assumes successful products scale through existing specialty-commercial infrastructure so only 0.18 of after-tax operating profit must be reinvested.
Why this confidence: Strong observed operating cash generation ↑, Bull-case growth could require additional manufacturing and inventory ↓
Measured by
- First-half capital expenditure to revenue3.9%derived
Evidence for
- First-half 2026 operating cash flow was $2.55 billion compared with $245.6 million of property and equipment purchases.[Vertex Q2 2026 Form 10-Q]· primary
Evidence against
- Capital expenditure increased 0.318 year over year in the first half of 2026, inventory absorbed $125.4 million, and Vertex is investing in dedicated cell-therapy capacity.[Vertex Q2 2026 Form 10-Q]· primary
Terminal growth3.0%low
How derived: Starting from the established CF franchise and broader pain, blood-disorder, kidney, diabetes, and endocrine portfolio, the case assumes sustained innovation and patient expansion support 0.030 mature nominal growth.
Why this confidence: Multiple commercial franchises and late-stage programs ↑, High clinical attrition and perpetual forecast horizon ↓
Measured by
- Second-quarter CF revenue share96.2%derived
Evidence for
- Vertex has approved products in four disease areas, added endocrine disease as a fifth commercial pillar, and has multiple late-stage programs that could extend growth beyond the explicit forecast.[Crinetics acquisition completion]· primary
Evidence against
- Management explicitly cautions that trial data may not support registration, approvals may not occur, and commercial launches may be delayed or unsuccessful.[Vertex Q2 2026 results]· primary
Valuation robustness
reliability of the estimate, not a stock rating48 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 85% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
- The reinvestment assumption is low-confidence.→ reinvestment
- The terminal growth assumption is low-confidence.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q3 2024 | 11.6% | 4.99 | 5.9% | 261M | 0.2% |
| Q1 2025 | 3.0% | 3 | -36.8% | 259.5M | -0.6% |
| Q2 2025 | 12.1% | 3.58 | 124.2% | 258.9M | 0.3% |
| Q3 2025 | 11.0% | 4.42 | -11.3% | 257.6M | -1.3% |
| Q1 2026 | 7.8% | 5.05 | 68.4% | 256.3M | -1.2% |
| Q2 2026 | 12.5% | 3.97 | 10.8% | 255.2M | -1.4% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
The latest available U.S. Treasury daily par-yield curve reported a 0.0478 ten-year yield on September 4, 2026.
The five-year market beta reported by S&P Global Market Intelligence for VRTX was 0.32 as of September 5, 2026.
The September 1, 2026 trailing-twelve-month adjusted-payout implied premium for U.S. equities was 0.0414.
VRTX closed at $546.12 on September 4, 2026, the latest completed trading session.
Generated 9/6/2026, 12:11:56 PM · pipeline v1.2.0