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

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In the latest trading session, Vertex Pharmaceuticals (VRTX - Free Report) closed at $215.01, marking a +0.87% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.74%.

Prior to today's trading, shares of the drugmaker had gained 1.37% over the past month. This has lagged the Medical sector's gain of 3.01% and the S&P 500's gain of 3.21% in that time.

The company is expected to report EPS of $2.73, up 4.6% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.72 billion, up 12.54% from the year-ago period.

VRTX's full-year Zacks Consensus Estimates are calling for earnings of $11.21 per share and revenue of $6.92 billion. These results would represent year-over-year changes of +8.62% and +11.44%, respectively.

It is also important to note the recent changes to analyst estimates for VRTX. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 2.71% lower. VRTX is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, VRTX is holding a Forward P/E ratio of 19.02. Its industry sports an average Forward P/E of 25.73, so we one might conclude that VRTX is trading at a discount comparatively.

Meanwhile, VRTX's PEG ratio is currently 1.6. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Medical - Biomedical and Genetics was holding an average PEG ratio of 1.34 at yesterday's closing price.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 222, which puts it in the bottom 13% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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