Vertex Pharmaceuticals Earnings Preview

Before you go, we thought you'd like these...
Before you go close icon

After beating estimates last quarter by $0.11, Vertex Pharmaceuticals (NAS: VRTX) has set the standard for itself. The company will unveil its latest earnings on Thursday, Oct. 27. Vertex Pharmaceuticals is engaged in the business of discovering, developing and commercializing small-molecule drugs for the treatment of serious diseases.

What analysts say:

  • Buy, sell, or hold?: The majority of analysts back Vertex Pharmaceuticals as a buy. But with 55% of analysts rating it a buy, Vertex Pharmaceuticals is still below the mean analyst rating of its nearest 10 competitors, which average 66.1% buys. Analysts don't like Vertex Pharmaceuticals as much as competitor Pharmasset overall. Fifteen out of 16 analysts rate Pharmasset a buy compared to 11 out of 20 for Vertex Pharmaceuticals. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $343.4 million in revenue this quarter. That would represent a rise of 1342.9% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.15 per share. Estimates range from a loss of $0.37 to a profit of $0.78.

What our community says:
CAPS All-Stars are solidly behind the stock, with 89% giving it an outperform rating. The community at large agrees with the All-Stars, with 91.7% assigning it a rating of outperform. Fools have embraced Vertex Pharmaceuticals and haven't been shy with their opinions lately, logging 306 posts in the past 30 days. Despite the majority sentiment in favor of Vertex Pharmaceuticals, the stock has a middling CAPS rating of three out of five stars.

Management:
Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters. 

QuarterQ2Q1Q4Q3
Gross Margin91.9%96.4%95.3%86.4%
Operating Margin(145%)(217.1%)(254.3%)(838.8%)
Net Margin(152.1%)(239.1%)(275.3%)(878.2%)

One final thing: If you want to keep tabs on Vertex Pharmaceuticals movements, and for more analysis on the company, make sure you add it to your Watchlist.

Motley Fool newsletter services have recommended buying shares of Vertex Pharmaceuticals.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

At the time this article was published

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners