Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
Current Valuation Ratios
Vertex Pharmaceuticals Inc., current price multiples
| Vertex Pharmaceuticals Inc. | AbbVie Inc. | Amgen Inc. | Bristol-Myers Squibb Co. | Danaher Corp. | Eli Lilly & Co. | Gilead Sciences Inc. | Johnson & Johnson | Merck & Co. Inc. | Pfizer Inc. | Regeneron Pharmaceuticals Inc. | Thermo Fisher Scientific Inc. | Pharmaceuticals, Biotechnology & Life Sciences | Health Care | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||
| Current share price (P) | $452.16 | ||||||||||||||||
| No. shares of common stock outstanding | 256,797,187 | ||||||||||||||||
| Earnings per share (EPS) | $-2.09 | ||||||||||||||||
| Operating profit per share | $-0.91 | ||||||||||||||||
| Sales per share | $42.91 | ||||||||||||||||
| Book value per share (BVPS) | $63.90 | ||||||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||||||
| Price to sales (P/S) | 10.54 | 5.96 | 4.88 | 2.00 | 6.03 | 16.33 | 4.86 | 4.22 | 3.20 | 2.24 | 4.07 | 3.71 | 5.13 | 2.39 | |||
| Price to book value (P/BV) | 7.08 | 100.93 | 26.58 | 5.92 | 2.90 | 51.81 | 7.19 | 5.25 | 4.44 | 1.61 | 1.97 | 3.21 | 6.50 | 5.01 | |||
Based on: 10-K (reporting date: 2024-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Vertex Pharmaceuticals Inc., historical price multiples
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).
- Price to Earnings (P/E) Ratio
- The price to earnings ratio exhibited an overall upward trend from 20.18 in 2020 to a peak of 30.42 in 2023, indicating increasing market valuation relative to earnings. There was a rise from 20.18 in 2020 to 26.55 in 2021, followed by a slight decrease to 23.02 in 2022, before a significant increase in 2023. Data for 2024 is not available.
- Price to Operating Profit (P/OP) Ratio
- This ratio showed fluctuating movement over the observed period. It started at 19.16 in 2020, increased to 22.35 in 2021, then decreased notably to 17.75 in 2022. Following the dip, there was a sharp rise to 28.74 in 2023, suggesting a higher market valuation relative to operating profit in that year. The value for 2024 is missing.
- Price to Sales (P/S) Ratio
- The price to sales ratio remained relatively stable around 8.2 to 8.8 throughout 2020 to 2022, with a slight dip in 2021 to 8.21 from 8.82 in 2020, and a minor recovery to 8.56 in 2022. However, in 2023, this ratio increased markedly to 11.16, indicating a higher price premium over sales. It slightly decreased to 10.78 in 2024, though still significantly above earlier years.
- Price to Book Value (P/BV) Ratio
- The price to book value ratio demonstrated a mild decline from 6.3 in 2020 to 5.5 in 2022, suggesting a lower market valuation relative to book value during this interval. However, the ratio rebounded to 6.26 in 2023 and further increased to 7.24 in 2024, reflecting a growing market premium over the book value towards the latter years.
Price to Earnings (P/E)
Vertex Pharmaceuticals Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 256,789,869 | 258,307,816 | 257,091,441 | 254,576,691 | 259,960,062 | |
| Selected Financial Data (US$) | ||||||
| Net income (loss) (in thousands) | (535,600) | 3,619,600) | 3,322,000) | 2,342,100) | 2,711,647) | |
| Earnings per share (EPS)2 | -2.09 | 14.01 | 12.92 | 9.20 | 10.43 | |
| Share price1, 3 | 462.58 | 426.29 | 297.40 | 244.24 | 210.50 | |
| Valuation Ratio | ||||||
| P/E ratio4 | — | 30.42 | 23.02 | 26.55 | 20.18 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| AbbVie Inc. | 79.59 | 63.84 | 22.62 | 22.07 | 40.17 | |
| Amgen Inc. | 38.24 | 23.14 | 19.56 | 21.05 | 18.82 | |
| Bristol-Myers Squibb Co. | — | 12.27 | 23.97 | 20.92 | — | |
| Danaher Corp. | 38.12 | 39.09 | 25.65 | 29.94 | 44.49 | |
| Eli Lilly & Co. | 77.63 | 135.24 | 50.08 | 40.66 | 31.95 | |
| Gilead Sciences Inc. | 296.57 | 16.17 | 22.68 | 12.36 | 641.48 | |
| Johnson & Johnson | 26.92 | 10.73 | 22.97 | 20.93 | 28.92 | |
| Merck & Co. Inc. | 13.49 | 893.99 | 19.21 | 14.78 | 26.72 | |
| Pfizer Inc. | 18.42 | 73.42 | 7.58 | 11.76 | 19.62 | |
| Regeneron Pharmaceuticals Inc. | 17.76 | 25.99 | 19.68 | 8.37 | 15.09 | |
| Thermo Fisher Scientific Inc. | 32.03 | 35.65 | 30.55 | 27.35 | 27.89 | |
| P/E Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 45.15 | 32.80 | 20.23 | 19.27 | 34.89 | |
| P/E Ratio, Industry | ||||||
| Health Care | 37.14 | 29.43 | 21.38 | 21.35 | 30.75 | |
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 Data adjusted for splits and stock dividends.
2 2024 Calculation
EPS = Net income (loss) ÷ No. shares of common stock outstanding
= -535,600,000 ÷ 256,789,869 = -2.09
3 Closing price as at the filing date of Vertex Pharmaceuticals Inc. Annual Report.
4 2024 Calculation
P/E ratio = Share price ÷ EPS
= 462.58 ÷ -2.09 = —
5 Click competitor name to see calculations.
The data reveals significant developments in key financial indicators over the five-year period ending in 2024. The share price exhibited a strong upward trajectory, rising from $210.50 at the end of 2020 to $462.58 by the end of 2024, indicating a considerable growth in market valuation and investor confidence.
Earnings per share (EPS) demonstrated fluctuations over the years. Starting at $10.43 in 2020, EPS decreased slightly to $9.20 in 2021. This was followed by an increase, reaching a peak of $14.01 in 2023. However, in 2024, EPS sharply declined to -$2.09, signaling a negative earnings outcome for that year. This sudden shift to negative earnings may warrant further investigation into the underlying causes, such as exceptional expenses, revenue decline, or other operational challenges.
The price-to-earnings (P/E) ratio exhibited variability aligned with the EPS and share price movements. From 20.18 in 2020, it increased to 26.55 in 2021, suggesting a higher valuation relative to earnings. It fell moderately to 23.02 in 2022 but then rose again to 30.42 in 2023, indicating that the market was willing to pay a premium on earnings possibly due to favorable growth expectations. The absence of P/E data for 2024 corresponds with the negative EPS, as a negative earnings figure typically renders the P/E ratio undefined or uninterpretable.
Overall, the data presents a narrative of growing market valuation and earnings improvement through 2023, followed by a notable earnings downturn in the most recent year. The sustained increase in share price despite the negative EPS in 2024 could reflect market anticipation of recovery or other strategic factors beyond immediate profitability metrics.
Price to Operating Profit (P/OP)
Vertex Pharmaceuticals Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 256,789,869 | 258,307,816 | 257,091,441 | 254,576,691 | 259,960,062 | |
| Selected Financial Data (US$) | ||||||
| Income (loss) from operations (in thousands) | (232,900) | 3,832,000) | 4,307,400) | 2,782,100) | 2,856,290) | |
| Operating profit per share2 | -0.91 | 14.84 | 16.75 | 10.93 | 10.99 | |
| Share price1, 3 | 462.58 | 426.29 | 297.40 | 244.24 | 210.50 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | — | 28.74 | 17.75 | 22.35 | 19.16 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| AbbVie Inc. | 37.26 | 24.34 | 14.78 | 14.21 | 16.32 | |
| Amgen Inc. | 21.55 | 19.69 | 13.40 | 16.24 | 14.96 | |
| Bristol-Myers Squibb Co. | — | 13.53 | 18.29 | 19.84 | — | |
| Danaher Corp. | 30.56 | 35.64 | 20.97 | 25.14 | 36.91 | |
| Eli Lilly & Co. | 63.73 | 109.75 | 43.88 | 35.70 | 32.66 | |
| Gilead Sciences Inc. | 85.65 | 12.05 | 14.21 | 7.76 | 19.38 | |
| Johnson & Johnson | 18.20 | 17.78 | 17.62 | 18.68 | 21.84 | |
| Merck & Co. Inc. | 11.60 | 138.56 | 15.55 | 15.39 | 23.89 | |
| Pfizer Inc. | 11.92 | 121.63 | 6.64 | 12.74 | 21.12 | |
| Regeneron Pharmaceuticals Inc. | 19.63 | 25.39 | 18.01 | 7.55 | 14.82 | |
| Thermo Fisher Scientific Inc. | 27.65 | 31.16 | 25.30 | 21.07 | 22.81 | |
| P/OP Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 31.13 | 32.68 | 15.94 | 16.68 | 25.95 | |
| P/OP Ratio, Industry | ||||||
| Health Care | 25.94 | 25.66 | 16.51 | 17.67 | 22.32 | |
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 Data adjusted for splits and stock dividends.
2 2024 Calculation
Operating profit per share = Income (loss) from operations ÷ No. shares of common stock outstanding
= -232,900,000 ÷ 256,789,869 = -0.91
3 Closing price as at the filing date of Vertex Pharmaceuticals Inc. Annual Report.
4 2024 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 462.58 ÷ -0.91 = —
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a consistent upward trend over the five-year period. It increased from $210.5 at the end of 2020 to $462.58 by the end of 2024, more than doubling in value. Notably, the most significant increments occurred between 2022 and 2023, and again from 2023 to 2024, indicating accelerating investor confidence or market valuation.
- Operating Profit Per Share
- Operating profit per share demonstrated variability throughout the timeline. Starting at $10.99 in 2020, it remained almost flat in 2021 at $10.93. A marked increase was observed in 2022, reaching $16.75, suggesting improved operational efficiency or profitability. However, this metric decreased slightly in 2023 to $14.84, followed by a sharp decline to a negative value of -$0.91 in 2024, indicating an operational loss during the final period.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio fluctuated significantly during the review period. It rose from 19.16 in 2020 to 22.35 in 2021, before declining to 17.75 in 2022, reflecting changes in either the share price or operating profit per share. A sharp increase to 28.74 was observed in 2023, suggesting elevated market valuation relative to operating profits. No data is available for 2024.
- Summary of Trends and Insights
- Overall, the data indicates substantial growth in share price despite volatility in operating profit per share. The operating profit per share experienced a peak followed by a drastic downturn in the final year, which may signal emerging operational challenges. Meanwhile, the P/OP ratio's increase in 2023 could imply heightened market optimism or expectations that are not fully supported by operating profits. The lack of P/OP data for 2024 limits full assessment of valuation relative to profits in that year. The divergence between increasing share price and declining operating profits in 2024 might suggest that share price appreciation is being driven by factors other than short-term operating profitability, potentially including market speculation, future growth expectations, or non-operating gains.
Price to Sales (P/S)
Vertex Pharmaceuticals Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 256,789,869 | 258,307,816 | 257,091,441 | 254,576,691 | 259,960,062 | |
| Selected Financial Data (US$) | ||||||
| Revenues (in thousands) | 11,020,100) | 9,869,200) | 8,930,700) | 7,574,400) | 6,205,683) | |
| Sales per share2 | 42.91 | 38.21 | 34.74 | 29.75 | 23.87 | |
| Share price1, 3 | 462.58 | 426.29 | 297.40 | 244.24 | 210.50 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 10.78 | 11.16 | 8.56 | 8.21 | 8.82 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| AbbVie Inc. | 6.04 | 5.72 | 4.61 | 4.53 | 4.05 | |
| Amgen Inc. | 4.88 | 5.78 | 5.17 | 5.10 | 5.64 | |
| Bristol-Myers Squibb Co. | 2.36 | 2.19 | 3.29 | 3.16 | 3.16 | |
| Danaher Corp. | 6.23 | 7.76 | 5.79 | 6.37 | 7.01 | |
| Eli Lilly & Co. | 18.25 | 20.77 | 10.96 | 8.01 | 8.06 | |
| Gilead Sciences Inc. | 4.98 | 3.40 | 3.86 | 2.85 | 3.24 | |
| Johnson & Johnson | 4.26 | 4.43 | 4.34 | 4.66 | 5.15 | |
| Merck & Co. Inc. | 3.60 | 5.43 | 4.71 | 3.96 | 3.93 | |
| Pfizer Inc. | 2.32 | 2.61 | 2.35 | 3.15 | 4.42 | |
| Regeneron Pharmaceuticals Inc. | 5.52 | 7.84 | 7.01 | 4.20 | 6.24 | |
| Thermo Fisher Scientific Inc. | 4.73 | 4.99 | 4.73 | 5.39 | 5.52 | |
| P/S Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 5.55 | 5.89 | 4.56 | 4.50 | 4.90 | |
| P/S Ratio, Industry | ||||||
| Health Care | 2.61 | 2.72 | 2.48 | 2.65 | 2.59 | |
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 Data adjusted for splits and stock dividends.
2 2024 Calculation
Sales per share = Revenues ÷ No. shares of common stock outstanding
= 11,020,100,000 ÷ 256,789,869 = 42.91
3 Closing price as at the filing date of Vertex Pharmaceuticals Inc. Annual Report.
4 2024 Calculation
P/S ratio = Share price ÷ Sales per share
= 462.58 ÷ 42.91 = 10.78
5 Click competitor name to see calculations.
- Share Price Trend
- The share price has demonstrated a consistent upward trajectory from 210.5 US$ in 2020 to 462.58 US$ in 2024. Notably, the increase accelerates significantly between 2022 and 2023, with the share price rising from 297.4 US$ to 426.29 US$ and continuing to increase in 2024, indicating strong market confidence and positive investor sentiment over the period.
- Sales per Share Analysis
- Sales per share have shown steady growth annually, increasing from 23.87 US$ in 2020 to 42.91 US$ in 2024. This consistent improvement points to enhanced operational performance and potentially expanding revenue streams contributing to higher sales attributable per share.
- Price-to-Sales (P/S) Ratio Evaluation
- The P/S ratio remains relatively stable around 8 to 9 between 2020 and 2022 but then experiences a notable rise in 2023 to 11.16 before slightly declining to 10.78 in 2024. This pattern suggests an increase in market valuation relative to sales during the mid-period, possibly reflecting heightened growth expectations or improved profitability outlook, although the slight decline at the end indicates a moderate market adjustment or valuation normalization.
- Overall Insights
- The simultaneous increase in share price and sales per share indicates robust fundamental growth. The elevated P/S ratio in the recent years highlights stronger market valuation relative to sales, which could be due to optimistic projections for future growth or strategic business advancements. The data collectively portrays a positive financial and market performance trajectory over the five-year span.
Price to Book Value (P/BV)
Vertex Pharmaceuticals Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 256,789,869 | 258,307,816 | 257,091,441 | 254,576,691 | 259,960,062 | |
| Selected Financial Data (US$) | ||||||
| Shareholders’ equity (in thousands) | 16,409,600) | 17,580,400) | 13,912,700) | 10,100,000) | 8,686,815) | |
| Book value per share (BVPS)2 | 63.90 | 68.06 | 54.12 | 39.67 | 33.42 | |
| Share price1, 3 | 462.58 | 426.29 | 297.40 | 244.24 | 210.50 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 7.24 | 6.26 | 5.50 | 6.16 | 6.30 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| AbbVie Inc. | 102.40 | 29.97 | 15.52 | 16.53 | 14.18 | |
| Amgen Inc. | 26.61 | 24.94 | 35.01 | 18.51 | 14.53 | |
| Bristol-Myers Squibb Co. | 6.98 | 3.35 | 4.88 | 4.07 | 3.55 | |
| Danaher Corp. | 3.00 | 3.47 | 3.64 | 4.16 | 3.93 | |
| Eli Lilly & Co. | 57.93 | 65.80 | 29.36 | 25.28 | 35.07 | |
| Gilead Sciences Inc. | 7.36 | 4.01 | 4.90 | 3.65 | 4.33 | |
| Johnson & Johnson | 5.30 | 5.48 | 5.37 | 5.90 | 6.72 | |
| Merck & Co. Inc. | 4.99 | 8.68 | 6.07 | 5.05 | 7.46 | |
| Pfizer Inc. | 1.68 | 1.75 | 2.48 | 3.35 | 2.98 | |
| Regeneron Pharmaceuticals Inc. | 2.67 | 3.96 | 3.77 | 3.60 | 4.81 | |
| Thermo Fisher Scientific Inc. | 4.09 | 4.57 | 4.83 | 5.18 | 5.15 | |
| P/BV Ratio, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 7.03 | 6.77 | 5.66 | 5.72 | 5.99 | |
| P/BV Ratio, Industry | ||||||
| Health Care | 5.48 | 5.44 | 4.90 | 5.07 | 4.90 | |
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 Data adjusted for splits and stock dividends.
2 2024 Calculation
BVPS = Shareholders’ equity ÷ No. shares of common stock outstanding
= 16,409,600,000 ÷ 256,789,869 = 63.90
3 Closing price as at the filing date of Vertex Pharmaceuticals Inc. Annual Report.
4 2024 Calculation
P/BV ratio = Share price ÷ BVPS
= 462.58 ÷ 63.90 = 7.24
5 Click competitor name to see calculations.
- Share Price
- The share price demonstrated a consistent upward trend over the five-year period. Starting at $210.5 at the end of 2020, it increased each year, reaching $462.58 by the end of 2024. Notably, the largest annual increase occurred between 2022 and 2023, with a rise from $297.4 to $426.29, indicating heightened market valuation or investor confidence during this interval.
- Book Value Per Share (BVPS)
- Book value per share showed steady growth from $33.42 in 2020 to a peak of $68.06 in 2023, nearly doubling over the four-year span. However, in 2024, BVPS experienced a slight decline to $63.9, representing a reduction after continuous growth. This decrease could suggest adjustments in the company’s net asset base or other balance sheet related factors in the most recent year.
- Price-to-Book Value (P/BV) Ratio
- The P/BV ratio fluctuated throughout the period, beginning at 6.3 in 2020 and marginally decreasing to 6.16 in 2021, then further to 5.5 in 2022. From 2022 onwards, it rose again, reaching 6.26 in 2023 and further increasing to 7.24 in 2024. The downward trend in the middle years followed by a rebound suggests that the market’s valuation relative to book value varied, with 2022 marking a lower point. The significant increase in 2024 implies a higher market premium over the book value compared to earlier years.
- Overall Insights
- Overall, the data reflects strong growth in the company’s market valuation as evidenced by the increasing share price. The growing BVPS until 2023 indicates improving equity value per share, although the 2024 dip merits monitoring to understand underlying causes. The evolving P/BV ratio points to shifting market perceptions of value relative to the company's net tangible assets, with the latest year's elevated ratio possibly indicating increased investor optimism or expectations of future growth beyond the book value.