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Why the Market Dipped But Vertex Pharmaceuticals (VRTX) Gained Today

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In the latest market close, Vertex Pharmaceuticals (VRTX - Free Report) reached $475.08, with a +1% movement compared to the previous day. The stock exceeded the S&P 500, which registered a loss of 0.33% for the day. At the same time, the Dow lost 0.22%, and the tech-heavy Nasdaq lost 0.56%.

Heading into today, shares of the drugmaker had gained 0.13% over the past month, outpacing the Medical sector's loss of 4.31% and lagging the S&P 500's gain of 1.83% in that time.

Investors will be eagerly watching for the performance of Vertex Pharmaceuticals in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on November 4, 2024. On that day, Vertex Pharmaceuticals is projected to report earnings of $4.13 per share, which would represent year-over-year growth of 1.23%. Our most recent consensus estimate is calling for quarterly revenue of $2.68 billion, up 7.79% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $0.06 per share and a revenue of $10.73 billion, demonstrating changes of -99.61% and +8.72%, respectively, from the preceding year.

It is also important to note the recent changes to analyst estimates for Vertex Pharmaceuticals. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 1.5% higher. At present, Vertex Pharmaceuticals boasts a Zacks Rank of #3 (Hold).

Looking at valuation, Vertex Pharmaceuticals is presently trading at a Forward P/E ratio of 7586.45. This expresses a premium compared to the average Forward P/E of 23.41 of its industry.

It's also important to note that VRTX currently trades at a PEG ratio of 572.78. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Medical - Biomedical and Genetics industry had an average PEG ratio of 2.57 as trading concluded yesterday.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This industry, currently bearing a Zacks Industry Rank of 82, finds itself in the top 33% echelons of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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