MODEL VERDICT
Vertex Pharmaceuticals Incorporated (VRTX) — Relative Valuation
Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Popular:
Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| Feb 28, 2026 | NEUTRAL | 0.24 | $496.83 | CURRENT | — |
| Feb 21, 2026 | NEUTRAL | 0.24 | $476.90 | CURRENT | — |
| Feb 14, 2026 | NEUTRAL | 0.20 | $491.47 | CURRENT | — |
| Feb 11, 2026 | NEUTRAL | 0.29 | $463.48 | CURRENT | — |
| Jan 11, 2026 | NEUTRAL | 0.20 | $463.86 | Below threshold | +1.5% |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 57 analyst estimates | $495.10 | -0.3% | 20% | A- | Analyst Est. |
| EV/EBITDA 47 industry peers | $307.99 | -38.0% | 20% | A- | Peer Data |
| Industry Median P/E 48 industry peers | $322.47 | -35.1% | 15% | A | Peer Data |
| Price / Free Cash Flow 46 industry peers | $327.14 | -34.2% | 15% | B+ | Peer Data |
| EV/EBIT 46 industry peers | $375.86 | -24.3% | 8% | B+ | Peer Data |
| EV/FCF 48 industry peers | $272.55 | -45.1% | 7% | B | Model Driven |
| Peg Ratio 9 industry peers | $105.93 | -78.7% | 5% | B | Data |
| EV To Revenue 130 industry peers | $404.95 | -18.5% | 4% | B | Data |
| Price / Sales 130 industry peers | $417.47 | -16.0% | 3% | B | Model Driven |
| Earnings Yield 47 industry peers | $363.11 | -26.9% | 2% | B | Data |
| FCF Yield 47 industry peers | $342.46 | -31.1% | 1% | B | Data |
| Weighted Output Blended model output | $403.80 | -18.7% | 100% | 85 | OVERVALUED |
| EPS Growth ↓ | P/E Multiple → | 26× | 29× | 32× (Current) | 35× | 38× |
|---|---|---|---|---|---|
| Bear Case (3%) | $412 | $459 | $506 | $554 | $601 |
| Conservative (5%) | $420 | $468 | $517 | $565 | $614 |
| Base Case (8.3%) | $431 | $481 | $531 | $581 | $630 |
| Bull Case (11%) | $443 | $494 | $545 | $596 | $647 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 29.55 | 26.83 | 22.53 | 48.55 | 9.80 |
| EV/EBIT | 71.24 | 21.80 | 15.21 | 362.01 | 128.43 |
| EV/EBITDA | 23.87 | 21.66 | 14.64 | 41.88 | 9.73 |
| P/FCF | 28.45 | 28.01 | 19.06 | 38.21 | 8.32 |
| P/FFO | 27.87 | 25.51 | 21.56 | 44.46 | 8.62 |
| P/TBV | 7.74 | 6.82 | 6.12 | 12.19 | 2.10 |
| P/AFFO | 30.14 | 27.50 | 22.91 | 47.24 | 8.96 |
| P/B Ratio | 6.60 | 6.27 | 5.38 | 9.38 | 1.35 |
| P/S Ratio | 9.94 | 9.75 | 7.54 | 13.71 | 1.97 |
Based on our peer multiples analysis with 28 valuation metrics, the model estimates VRTX's fair value at $403.80 vs the current price of $496.83, implying -18.7% downside potential. Model verdict: Overvalued. Confidence: 85/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $403.80 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $326.49 (P10) to $564.45 (P90), with a median of $434.53.
VRTX's current P/E of 32.4x compares to the industry median of 21.0x (48 peers in the group). This represents a +54.1% premium to the industry. The historical average P/E is 29.6x over 6 years. Signal: High Premium.
55 analysts cover VRTX with a consensus rating of Buy. The consensus price target is $545.08 (range: $441.00 — $607.00), implying +9.7% upside from the current price. Grade breakdown: Strong Buy (0), Buy (46), Hold (9), Sell (0), Strong Sell (0).
The model confidence score is 85/100, based on: data completeness (30), peer quality (25), historical depth (20), earnings stability (8), and model agreement (2). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Multiple compression: VRTX trades at the 5620th percentile of its historical P/E range. A reversion to median (29.6×) would imply significant downside. (2) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that VRTX's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of +0.1σ, meaning margins are 0.1 standard deviations above their historical average. If margins revert to the 6-year mean (29.3%), the model estimates fair value drops by 1500.0% to approximately $422. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.