Stock Analysis on Net

Vertex Pharmaceuticals Inc. (NASDAQ:VRTX)

Return on Capital (ROC)

Microsoft Excel

Return on Invested Capital (ROIC)

Vertex Pharmaceuticals Inc., ROIC calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in thousands)
Net operating profit after taxes (NOPAT)1 (1,271,806) 2,639,623 2,986,401 2,239,320 3,023,861
Invested capital2 9,046,000 13,244,000 13,178,000 9,387,100 8,144,266
Performance Ratio
ROIC3 -14.06% 19.93% 22.66% 23.86% 37.13%
Benchmarks
ROIC, Competitors4
AbbVie Inc. 6.59% 4.83% 14.05% 12.89% 4.30%
Amgen Inc. 8.51% 11.15% 16.11% 15.93% 20.35%
Bristol-Myers Squibb Co. -14.83% 8.69% 6.37% 8.29% -7.57%
Danaher Corp. 4.64% 3.94% 8.76% 9.01% 7.43%
Eli Lilly & Co. 23.65% 10.52% 17.78% 19.28% 25.89%
Gilead Sciences Inc. -1.80% 11.10% 8.09% 14.43% 1.26%
Johnson & Johnson 10.76% 8.98% 14.16% 19.23% 13.97%
Merck & Co. Inc. 21.08% -1.02% 19.14% 18.87% 11.66%
Pfizer Inc. 5.43% -0.82% 28.01% 20.98% 5.87%
Regeneron Pharmaceuticals Inc. 26.67% 23.53% 28.87% 72.50% 43.95%
Thermo Fisher Scientific Inc. 6.58% 5.98% 7.76% 9.36% 10.70%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 NOPAT. See details »

2 Invested capital. See details »

3 2024 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × -1,271,806 ÷ 9,046,000 = -14.06%

4 Click competitor name to see calculations.

Performance ratio Description The company
ROIC A measure of the periodic, after tax, cash-on-cash yield earned in the business. Vertex Pharmaceuticals Inc. ROIC deteriorated from 2022 to 2023 and from 2023 to 2024.

Decomposition of ROIC

Vertex Pharmaceuticals Inc., decomposition of ROIC

Microsoft Excel
ROIC = OPM1 × TO2 × 1 – CTR3
Dec 31, 2024 -14.06% = -2.19% × 1.22 × 100.00%
Dec 31, 2023 19.93% = 38.69% × 0.75 × 69.13%
Dec 31, 2022 22.66% = 46.55% × 0.68 × 71.84%
Dec 31, 2021 23.86% = 36.91% × 0.81 × 80.09%
Dec 31, 2020 37.13% = 50.94% × 0.76 × 95.66%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Operating profit margin (OPM). See calculations »

2 Turnover of capital (TO). See calculations »

3 Effective cash tax rate (CTR). See calculations »

The primary reason for the decrease in return on invested capital (ROIC) over 2024 year is the decrease in profitability measured by operating profit margin (OPM) ratio.


Operating Profit Margin (OPM)

Vertex Pharmaceuticals Inc., OPM calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in thousands)
Net operating profit after taxes (NOPAT)1 (1,271,806) 2,639,623 2,986,401 2,239,320 3,023,861
Add: Cash operating taxes2 1,029,919 1,178,814 1,170,431 556,675 137,080
Net operating profit before taxes (NOPBT) (241,888) 3,818,437 4,156,831 2,795,994 3,160,940
 
Revenues 11,020,100 9,869,200 8,930,700 7,574,400 6,205,683
Profitability Ratio
OPM3 -2.19% 38.69% 46.55% 36.91% 50.94%
Benchmarks
OPM, Competitors4
AbbVie Inc. 10.48% 14.58% 26.77% 27.06% 13.19%
Amgen Inc. 24.36% 40.00% 35.35% 32.55% 38.71%
Bristol-Myers Squibb Co. -12.88% 21.81% 19.38% 20.31% -12.65%
Danaher Corp. 19.69% 21.44% 27.12% 27.65% 23.43%
Eli Lilly & Co. 29.70% 19.99% 24.99% 22.91% 30.98%
Gilead Sciences Inc. 4.92% 27.67% 24.71% 34.43% 10.83%
Johnson & Johnson 18.19% 17.15% 22.67% 24.39% 20.20%
Merck & Co. Inc. 32.71% 4.63% 30.22% 30.60% 19.13%
Pfizer Inc. 15.40% 1.40% 38.53% 29.86% 19.18%
Regeneron Pharmaceuticals Inc. 30.25% 29.03% 39.28% 57.80% 45.28%
Thermo Fisher Scientific Inc. 17.13% 15.91% 18.33% 23.79% 24.12%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2024 Calculation
OPM = 100 × NOPBT ÷ Revenues
= 100 × -241,888 ÷ 11,020,100 = -2.19%

4 Click competitor name to see calculations.

Profitability ratio Description The company
OPM The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. Vertex Pharmaceuticals Inc. OPM deteriorated from 2022 to 2023 and from 2023 to 2024.

Turnover of Capital (TO)

Vertex Pharmaceuticals Inc., TO calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in thousands)
Revenues 11,020,100 9,869,200 8,930,700 7,574,400 6,205,683
Invested capital1 9,046,000 13,244,000 13,178,000 9,387,100 8,144,266
Efficiency Ratio
TO2 1.22 0.75 0.68 0.81 0.76
Benchmarks
TO, Competitors3
AbbVie Inc. 0.81 0.80 0.71 0.59 0.44
Amgen Inc. 0.51 0.38 0.62 0.60 0.63
Bristol-Myers Squibb Co. 0.77 0.67 0.64 0.58 0.47
Danaher Corp. 0.32 0.30 0.40 0.40 0.34
Eli Lilly & Co. 1.26 1.16 1.17 1.08 1.00
Gilead Sciences Inc. 0.65 0.59 0.59 0.57 0.48
Johnson & Johnson 0.83 0.86 0.83 0.96 0.84
Merck & Co. Inc. 0.81 0.86 0.80 0.69 0.84
Pfizer Inc. 0.47 0.38 0.91 0.94 0.41
Regeneron Pharmaceuticals Inc. 1.14 1.10 0.99 1.48 1.03
Thermo Fisher Scientific Inc. 0.52 0.50 0.54 0.49 0.53

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Invested capital. See details »

2 2024 Calculation
TO = Revenues ÷ Invested capital
= 11,020,100 ÷ 9,046,000 = 1.22

3 Click competitor name to see calculations.

Efficiency ratio Description The company
TO The turnover of capital (TO) is the ratio of sales to invested capital. Capital turnover is a function of the efficiency of working capital management and of net fixed assets. Vertex Pharmaceuticals Inc. TO improved from 2022 to 2023 and from 2023 to 2024.

Effective Cash Tax Rate (CTR)

Vertex Pharmaceuticals Inc., CTR calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in thousands)
Net operating profit after taxes (NOPAT)1 (1,271,806) 2,639,623 2,986,401 2,239,320 3,023,861
Add: Cash operating taxes2 1,029,919 1,178,814 1,170,431 556,675 137,080
Net operating profit before taxes (NOPBT) (241,888) 3,818,437 4,156,831 2,795,994 3,160,940
Tax Rate
CTR3 30.87% 28.16% 19.91% 4.34%
Benchmarks
CTR, Competitors4
AbbVie Inc. 22.68% 58.42% 25.72% 18.70% 26.24%
Amgen Inc. 31.09% 27.52% 27.01% 18.93% 15.91%
Bristol-Myers Squibb Co. 40.21% 48.91% 29.34%
Danaher Corp. 27.31% 39.60% 19.69% 18.58% 7.07%
Eli Lilly & Co. 36.72% 54.70% 39.42% 22.30% 16.37%
Gilead Sciences Inc. 156.51% 31.75% 44.70% 25.84% 76.01%
Johnson & Johnson 29.05% 39.03% 25.14% 17.53% 17.68%
Merck & Co. Inc. 20.23% 125.66% 20.99% 10.42% 27.35%
Pfizer Inc. 24.76% 252.75% 20.44% 25.02% 25.53%
Regeneron Pharmaceuticals Inc. 22.67% 26.07% 26.00% 15.19% 5.43%
Thermo Fisher Scientific Inc. 26.49% 24.94% 21.94% 19.99% 15.79%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 NOPAT. See details »

2 Cash operating taxes. See details »

3 2024 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 1,029,919 ÷ -241,888 =

4 Click competitor name to see calculations.