Is Vertex Stock Worth More Than Its Competitors?
Vertex Pharmaceuticals (VRTX) stock trades at 29.0 times earnings. That valuation prices the company higher than Regeneron and Incyte, two of its biotech peers. Vertex does generate the highest operating margin among its group of five companies, but its sales are growing more slowly than at three of the other four. So how much more are you paying for Vertex, and what do you get for it?
Vertex’s P/E Is Double Incyte’s
Investors paying the premium for Vertex get superior profitability, but not faster expansion. Vertex currently trades at 29.0 times its trailing earnings, compared with 14.0 for Incyte. The payoff for that higher multiple is a wider operating margin. Over the past twelve months, Vertex converted 37.9% of its sales into operating profit, beating the 31.6% margin at Incyte. Growth is a different story. Incyte saw its revenue rise 26.9% during that same period, while revenue at Vertex rose 10.2%.
| VRTX | REGN | BMRN | ALNY | INCY | |
|---|---|---|---|---|---|
| Market Cap ($ Bil) | 127.7 | 76.0 | 10.6 | 30.0 | 22.6 |
| PE Ratio (LTM) | 29.0 | 17.6 | 145.5 | 37.1 | 14.0 |
| LTM Revenue Growth | 10.2% | 9.3% | 11.2% | 95.1% | 26.9% |
| LTM Operating Margin | 37.9% | 26.9% | 4.4% | 20.8% | 31.6% |
| 12M Stock Return | 22.7% | 27.5% | 0.3% | -51.1% | 29.3% |
Within this group, only Alnylam trades at a higher comparable P/E, carrying a multiple of 37.1. However, Alnylam also grew its revenue by 95.1%. Regeneron stands out as the single peer with both a lower P/E and slower revenue growth than Vertex. BioMarin carries a P/E of 145.5, but that figure is not directly comparable because the company reported a loss in at least one of its last four quarters.
Vertex Depends On Cystic Fibrosis
The financial engine at Vertex relies almost entirely on cystic fibrosis drugs, which bring in nearly all of the sales. During fiscal 2025, the company reported $12.0 billion in total revenue, and a single product, TRIKAFTA/KAFTRIO, produced $10.3 billion of that total. These established medicines are also cheaper to make. On the second-quarter 2026 call, management noted that the newer therapies in the portfolio, particularly CASGEVY, cost more to manufacture than the core cystic fibrosis drugs.
The challenge is that sales for TRIKAFTA/KAFTRIO have largely stalled, with revenue rising just 0.7% in fiscal 2025. Management said ALYFTREK led growth in U.S. cystic fibrosis sales in the second quarter of 2026. ALYFTREK brought in about $1 billion in revenue in the first half of 2026. Beyond cystic fibrosis, the commercial footprint remains limited. Out of the $3.3 billion in overall revenue generated in the second quarter of 2026, CASGEVY brought in $76 million, while the pain drug JOURNAVX added $50 million.
Can Vertex Grow Beyond Cystic Fibrosis?
According to management’s own forecast, drugs outside of cystic fibrosis will remain only a small part of sales in 2026. During the second-quarter 2026 call, management raised the full-year revenue forecast to a range between $13.1 billion and $13.2 billion, which did not include Crinetics. That target sits about 10% above the revenue Vertex reported for 2025, aligning closely with its growth rate over the past twelve months. Of that total, management expects at least $500 million to come from products outside cystic fibrosis.
To expand its footprint, Vertex has a kidney disease drug awaiting an FDA decision due on November 30, 2026. Regulatory approval would give the company a drug to sell in the kidney disease market, creating a business that management says could one day rival cystic fibrosis in revenue.
Vertex is also turning to acquisitions to buy its way into another field. The company completed its purchase of Crinetics, a deal worth about $8.8 billion net of acquired cash. Management noted that the deal adds a business in rare endocrine diseases, and expects it to start adding to non-GAAP operating income in 2029.
The current share price appears to assume that Vertex will keep the highest margin in its group while its drugs outside cystic fibrosis grow large enough to lift total sales. Vertex clearly has that margin right now. But the treatments outside of the core cystic fibrosis franchise have yet to add much to sales.
Does This Mean You Should Act On VRTX?
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