Comprehensive Stock Comparison
Compare Arrowhead Pharmaceuticals, Inc. (ARWR) vs Vertex Pharmaceuticals Incorporated (VRTX) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | ARWR | 232.6% revenue growth vs VRTX's 8.9% |
| Value | VRTX | Better valuation composite |
| Quality / Margins | VRTX | 31.3% net margin vs ARWR's 18.5% |
| Stability / Safety | VRTX | Beta 0.44 vs ARWR's 1.67, lower leverage |
| Dividends | Tie | Neither pays a meaningful dividend |
| Momentum (1Y) | ARWR | +234.6% vs VRTX's +3.6% |
| Efficiency (ROA) | VRTX | 14.8% ROA vs ARWR's 12.6%, ROIC 22.8% vs 7.2% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Defensive / Recession hedge
Business Model
What each company does and how it makes money
Arrowhead Pharmaceuticals is a biotechnology company that develops RNA interference (RNAi) therapeutics for intractable diseases. It generates revenue primarily through research collaborations and licensing agreements with pharmaceutical partners — including upfront payments, milestone payments, and royalties on future sales — while advancing its own pipeline of clinical-stage candidates. The company's key advantage is its proprietary Targeted RNAi Molecule (TRiM™) platform, which enables precise delivery of RNAi therapeutics to specific tissues and cells.
Vertex Pharmaceuticals is a biotechnology company focused on developing and commercializing transformative medicines for serious diseases, with its flagship franchise targeting cystic fibrosis. It generates nearly all its revenue from CF therapies — primarily Trikafta/Kaftrio — while building a pipeline in pain, kidney disease, and type 1 diabetes. Its moat stems from deep scientific expertise in CFTR biology and a dominant, near-monopoly position in the CF treatment market.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Segment breakdown not available.
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
VRTX leads in 3 of 6 categories (Valuation Metrics, Profitability & Efficiency). ARWR leads in 2 (Financial Metrics, Total Returns).
Financial Metrics (TTM)
VRTX is the larger business by revenue, generating $11.7B annually — 10.7x ARWR's $1.1B. VRTX is the more profitable business, keeping 31.3% of every revenue dollar as net income compared to ARWR's 18.5%. On growth, ARWR holds the edge at +104.6% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | ARWRArrowhead Pharmac… | VRTXVertex Pharmaceut… |
|---|---|---|
| RevenueTrailing 12 months | $1.1B | $11.7B |
| EBITDAEarnings before interest/tax | $326M | $4.2B |
| Net IncomeAfter-tax profit | $202M | $3.7B |
| Free Cash FlowCash after capex | $322M | $3.3B |
| Gross MarginGross profit ÷ Revenue | +99.4% | +86.3% |
| Operating MarginEBIT ÷ Revenue | +27.6% | +34.1% |
| Net MarginNet income ÷ Revenue | +18.5% | +31.3% |
| FCF MarginFCF ÷ Revenue | +29.5% | +28.5% |
| Rev. Growth (YoY)Latest quarter vs prior year | +104.6% | +11.0% |
| EPS Growth (YoY)Latest quarter vs prior year | +115.8% | +4.7% |
Valuation Metrics
On an enterprise value basis, VRTX's 26.6x EV/EBITDA is more attractive than ARWR's 76.1x.
| Metric | ARWRArrowhead Pharmac… | VRTXVertex Pharmaceut… |
|---|---|---|
| Market CapShares × price | $8.7B | $126.2B |
| Enterprise ValueMkt cap + debt − cash | $9.3B | $124.8B |
| Trailing P/EPrice ÷ TTM EPS | -5186.07x | 32.43x |
| Forward P/EPrice ÷ next-FY EPS est. | — | 25.66x |
| PEG RatioP/E ÷ EPS growth rate | — | 3.91x |
| EV / EBITDAEnterprise value multiple | 76.09x | 26.63x |
| Price / SalesMarket cap ÷ Revenue | 10.48x | 10.52x |
| Price / BookPrice ÷ Book value/share | 16.81x | 6.87x |
| Price / FCFMarket cap ÷ FCF | 55.41x | 39.51x |
Profitability & Efficiency
ARWR delivers a 35.9% return on equity — every $100 of shareholder capital generates $36 in annual profit, vs $21 for VRTX. VRTX carries lower financial leverage with a 0.20x debt-to-equity ratio, signaling a more conservative balance sheet compared to ARWR's 1.66x.
| Metric | ARWRArrowhead Pharmac… | VRTXVertex Pharmaceut… |
|---|---|---|
| ROE (TTM)Return on equity | +35.9% | +21.2% |
| ROA (TTM)Return on assets | +12.6% | +14.8% |
| ROICReturn on invested capital | +7.2% | +22.8% |
| ROCEReturn on capital employed | +8.6% | +23.0% |
| Piotroski ScoreFundamental quality 0–9 | 5 | 5 |
| Debt / EquityFinancial leverage | 1.66x | 0.20x |
| Net DebtTotal debt minus cash | $611M | $3.7B |
| Cash & Equiv.Liquid assets | $227M | $5.1B |
| Total DebtShort + long-term debt | $838M | $3.7B |
| Interest CoverageEBIT ÷ Interest expense | 3.83x | 348.55x |
Total Returns (with DRIP)
A $10,000 investment in VRTX five years ago would be worth $23,616 today (with dividends reinvested), compared to $7,552 for ARWR. Over the past 12 months, ARWR leads with a +234.6% total return vs VRTX's +3.6%. The 3-year compound annual growth rate (CAGR) favors ARWR at 25.1% vs VRTX's 19.6% — a key indicator of consistent wealth creation.
| Metric | ARWRArrowhead Pharmac… | VRTXVertex Pharmaceut… |
|---|---|---|
| YTD ReturnYear-to-date | -6.7% | +9.9% |
| 1-Year ReturnPast 12 months | +234.6% | +3.6% |
| 3-Year ReturnCumulative with dividends | +95.9% | +71.1% |
| 5-Year ReturnCumulative with dividends | -24.5% | +136.2% |
| 10-Year ReturnCumulative with dividends | +1522.3% | +481.2% |
| CAGR (3Y)Annualised 3-year return | +25.1% | +19.6% |
Risk & Volatility
VRTX is the less volatile stock with a 0.44 beta — it tends to amplify market swings less than ARWR's 1.67 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. VRTX currently trades 95.6% from its 52-week high vs ARWR's 82.4% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | ARWRArrowhead Pharmac… | VRTXVertex Pharmaceut… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 1.67x | 0.44x |
| 52-Week HighHighest price in past year | $76.76 | $519.68 |
| 52-Week LowLowest price in past year | $9.57 | $362.50 |
| % of 52W HighCurrent price vs 52-week peak | +82.4% | +95.6% |
| RSI (14)Momentum oscillator 0–100 | 46.7 | 54.6 |
| Avg Volume (50D)Average daily shares traded | 2.5M | 1.2M |
Analyst Outlook
Wall Street rates ARWR as "Buy" and VRTX as "Buy". Consensus price targets imply 24.5% upside for ARWR (target: $79) vs 9.7% for VRTX (target: $545).
| Metric | ARWRArrowhead Pharmac… | VRTXVertex Pharmaceut… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $78.78 | $545.08 |
| # AnalystsCovering analysts | 20 | 55 |
| Dividend YieldAnnual dividend ÷ price | — | — |
| Dividend StreakConsecutive years of raises | — | — |
| Dividend / ShareAnnual DPS | — | — |
| Buyback YieldShare repurchases ÷ mkt cap | 0.0% | +1.6% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| Arrowhead Pharmaceu… (ARWR) | 100 | 205.63 | +105.6% |
| Vertex Pharmaceutic… (VRTX) | 100 | 203.2 | +103.2% |
Vertex Pharmaceutic… (VRTX) returned +136% over 5 years vs Arrowhead Pharmaceu… (ARWR)'s -24%. A $10,000 investment in VRTX 5 years ago would be worth $23,616 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Arrowhead Pharmaceu… (ARWR) | $158333.00 | $829M | +523763.0% |
| Vertex Pharmaceutic… (VRTX) | $1.7B | $12.0B | +605.1% |
Arrowhead Pharmaceuticals, Inc.'s revenue grew from $0M (2016) to $829M (2025) — a 159.0% CAGR. Vertex Pharmaceuticals Incorporated's revenue grew from $1.7B (2016) to $12.0B (2025) — a 24.2% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Arrowhead Pharmaceu… (ARWR) | -516.1% | -0.2% | +100.0% |
| Vertex Pharmaceutic… (VRTX) | -6.6% | 32.9% | +600.4% |
Arrowhead Pharmaceuticals, Inc.'s net margin went from -516% (2016) to -0% (2025). Vertex Pharmaceuticals Incorporated's net margin went from -7% (2016) to 33% (2025).
Chart 4P/E Ratio History — 8 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Vertex Pharmaceutic… (VRTX) | 144.1 | 29.6 | -79.5% |
Vertex Pharmaceuticals Incorporated has traded in a 21x–144x P/E range over 8 years; current trailing P/E is ~32x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Arrowhead Pharmaceu… (ARWR) | -1.34 | -0.01 | +99.1% |
| Vertex Pharmaceutic… (VRTX) | -0.46 | 15.32 | +3430.4% |
Arrowhead Pharmaceuticals, Inc.'s EPS grew from $-1.34 (2016) to $-0.01 (2025). Vertex Pharmaceuticals Incorporated's EPS grew from $-0.46 (2016) to $15.32 (2025).
Chart 6Free Cash Flow — 5 Years
Arrowhead Pharmaceuticals, Inc. generated $157M FCF in 2025 (+6% vs 2021). Vertex Pharmaceuticals Incorporated generated $3B FCF in 2025 (+33% vs 2021).
ARWR vs VRTX: Frequently Asked Questions
8 questions · data-driven answers · updated daily
01Is ARWR or VRTX a better buy right now?
Vertex Pharmaceuticals Incorporated (VRTX) offers the better valuation at 32.4x trailing P/E (25.7x forward), making it the more compelling value choice. Analysts rate Arrowhead Pharmaceuticals, Inc. (ARWR) a "Buy" — based on 20 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which is the better long-term investment — ARWR or VRTX?
Over the past 5 years, Vertex Pharmaceuticals Incorporated (VRTX) delivered a total return of +136.2%, compared to -24.5% for Arrowhead Pharmaceuticals, Inc. (ARWR). A $10,000 investment in VRTX five years ago would be worth approximately $24K today (assuming dividends reinvested). Over 10 years, the gap is even starker: ARWR returned +1522% versus VRTX's +481.2%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
03Which is safer — ARWR or VRTX?
By beta (market sensitivity over 5 years), Vertex Pharmaceuticals Incorporated (VRTX) is the lower-risk stock at 0.44β versus Arrowhead Pharmaceuticals, Inc.'s 1.67β — meaning ARWR is approximately 278% more volatile than VRTX relative to the S&P 500. On balance sheet safety, Vertex Pharmaceuticals Incorporated (VRTX) carries a lower debt/equity ratio of 20% versus 166% for Arrowhead Pharmaceuticals, Inc. — giving it more financial flexibility in a downturn.
04Which has better profit margins — ARWR or VRTX?
Vertex Pharmaceuticals Incorporated (VRTX) is the more profitable company, earning 32.9% net margin versus -0.2% for Arrowhead Pharmaceuticals, Inc. — meaning it keeps 32.9% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: VRTX leads at 39.1% versus 11.9% for ARWR. At the gross margin level — before operating expenses — ARWR leads at 97.1%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
05Is ARWR or VRTX more undervalued right now?
Analyst consensus price targets imply the most upside for ARWR: 24.5% to $78.78.
06Which pays a better dividend — ARWR or VRTX?
None of the stocks in this comparison currently pay a material dividend. All are effectively zero-yield and should be held for capital appreciation rather than income.
07Is ARWR or VRTX better for a retirement portfolio?
For long-horizon retirement investors, Vertex Pharmaceuticals Incorporated (VRTX) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.44), +481.2% 10Y return). Arrowhead Pharmaceuticals, Inc. (ARWR) carries a higher beta of 1.67 — meaning larger drawdowns in market downturns, which matters significantly when you cannot wait years for a recovery. Both have compounded well over 10 years (VRTX: +481.2%, ARWR: +1522%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
08What are the main differences between ARWR and VRTX?
Both stocks operate in the Healthcare sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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