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Vertex Pharmaceuticals Incorporated Just Missed EPS By 39%: Here's What Analysts Think Will Happen Next
Last week saw the newest third-quarter earnings release from Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), an important milestone in the company's journey to build a stronger business. It looks like a pretty bad result, all things considered. Although revenues of US$3.4b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 39% to hit US$2.56 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from Vertex Pharmaceuticals' 24 analysts is for revenues of US$14.6b in 2027. This would reflect a decent 13% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to swell 13% to US$17.75. Before this earnings report, the analysts had been forecasting revenues of US$14.6b and earnings per share (EPS) of US$18.59 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
Check out our latest analysis for Vertex Pharmaceuticals
It might be a surprise to learn that the consensus price target was broadly unchanged at US$579, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Vertex Pharmaceuticals at US$725 per share, while the most bearish prices it at US$350. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Vertex Pharmaceuticals'historical trends, as the 10% annualised revenue growth to the end of 2027 is roughly in line with the 11% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 21% per year. So it's pretty clear that Vertex Pharmaceuticals is expected to grow slower than similar companies in the same industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$579, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Vertex Pharmaceuticals going out to 2028, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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