Vertex Pharmaceuticals Inc. Stock Underperforms

The Shares of  Vertex Pharmaceuticals Inc. slid 1.42% to $214.85 Tuesday. This proved to be an all-around mixed trading session for the stock market, with the Dow Jones Industrial Average DJIA rising 0.06% to 34,133.03 and the S&P 500 Index SPX falling 0.67% to 4,164.66. This was the stock’s second consecutive day of losses.

Vertex Pharmaceuticals Inc. closed $91.23 short of its 52-week high, which the company reached on July 7th. The stock underperformed when compared to some of its competitors Tuesday, as Johnson & Johnson JNJ rose 1.55% to $167.77, Merck & Co. Inc. MRK rose 0.01% to $75.99, and AbbVie Inc. ABBV fell 0.68% to $113.90. Trading volume (1.8 M) remained 30,821 below its 50-day average volume of 1.8 M.

Vertex Pharmaceuticals Inc is undervalued, the long-term return of its stock is likely to be much higher than its business growth, which averaged 33.8% over the past three years and is estimated to grow 11.68% annually over the next three to five years. At its current price of $211.8975 per share and the market cap of $54.9 billion, Vertex Pharmaceuticals stock gives every indication of being significantly undervalued.

Pharmaceuticals has a cash-to-debt ratio of 7.15, which ranks in the middle range of the companies in the Biotechnology industry. The overall financial strength of the Pharmaceuticals is 8 out of 10, which indicates that the financial strength of Vertex Pharmaceuticals is strong. It has been profitable 5 over the past 10 years. Over the past twelve months, the company had revenue of $6.2 billion and earnings of $10.3 a share. Its operating margin is 46.24%, which ranks better than 96% of the companies in the Biotechnology industry.