How Will Vertex Pharmaceuticals Stock React To Its Upcoming Earnings?

Vertex Pharmaceuticals (NASDAQ:VRTX) is scheduled to announce its earnings on Monday, May 5, 2025. For event-driven traders, understanding historical stock performance around earnings releases can be beneficial. Over the past five years, VRTX has experienced a positive one-day return following earnings in 58% of cases. When positive, the median return has been 3.0%, with a maximum positive return of 9.0%.

This upcoming earnings report is expected to show $4.29 in earnings per share on $2.86 billion in sales, according to consensus estimates. This compares to the prior year’s same quarter, which saw earnings of $4.76 per share on sales of $2.69 billion.

The market’s reaction will largely depend on how the actual results compare to these consensus figures and overall market expectations. However, historical data suggests potential trading strategies. One approach is to analyze the historical probability of positive returns and establish a position before the earnings announcement. Alternatively, traders can examine the correlation between immediate post-earnings returns and medium-term performance to inform positioning after the results are released.

From a fundamental perspective, VRTX currently has a market capitalization of $130 billion. The company’s revenue over the trailing twelve months was $11 billion, and it demonstrated operational profitability with $4.4 billion in operating profits, although it reported a net income of $-536 million.

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Vertex Pharmaceuticals’ Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

• There are 19 earnings data points recorded over the last five years, with 11 positive and 8 negative one-day (1D) returns observed.
• In summary, positive 1D returns were seen about 58% of the time.
• However, this percentage decreases to 50% if we consider data for the last 3 years instead of 5.
• Median of the 11 positive returns = 3.0%, and median of the 8 negative returns = -3.1%

Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

VRTX 1D, 5D, and 21D Post-Earnings Return

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

VRTX Correlation Between 1D, 5D and 21D Historical Returns

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