Stock Analysis on Net
Stock Analysis on Net

Vertex Pharmaceuticals Inc. (NASDAQ:VRTX)

$24.99

Return on Equity (ROE)
since 2005

Microsoft Excel

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Calculation

Vertex Pharmaceuticals Inc., ROE, long-term trends, calculation

Microsoft Excel
ROE = 100 × Net income (loss)1 ÷ Shareholders’ equity1
Dec 31, 2024 = 100 × ÷
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Dec 31, 2005 = 100 × ÷

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), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).

1 US$ in thousands

The data reveals significant fluctuations in net income (loss) and shareholders’ equity over the observed periods, accompanied by varying returns on equity (ROE). These metrics illustrate the company's financial performance and capital efficiency, with some notable patterns and shifts.

Net Income (Loss)
Net income shows a trend of considerable volatility throughout the years. From 2005 to 2011, the company experienced predominantly substantial losses, reaching a peak loss in 2010 with approximately -754.6 million USD. Only in 2011 is a small positive net income of around 29.6 million USD recorded, after which losses resumed in the subsequent years. Starting from 2013, net income continued to be significantly negative, hitting a steep loss in 2014 near -738.6 million USD. A marked turnaround appears from 2016 onwards, with the company achieving positive net income, culminating in a peak of approximately 2.1 billion USD in 2018 and maintaining positive performance through 2023. However, an anomaly arises in 2024 with a sharp loss of -535.6 million USD, contrasting the previous positive trend.
Shareholders’ Equity
Shareholders’ equity demonstrates a general upward trajectory despite fluctuations. Initially, equity grows from 239.2 million USD in 2005 to over 1 billion USD by 2009. There is some variability until about 2013, but a strong and continuous increase is evident starting in 2014, rising from approximately 1.08 billion USD to a high of 17.58 billion USD by 2023. A slight decline to 16.41 billion USD is noted in 2024. This overall increase points to bolstered financial strength and accumulated capital over the long term.
Return on Equity (ROE)
The ROE metric reflects the company’s varying profitability relative to shareholders' equity, initially showing deeply negative returns, which is consistent with the net losses recorded. Its lowest points include values less than -140% in 2007 and 2010. From 2012 to 2016, ROE remains near zero or slightly negative, indicating marginal profitability or breaks even. A definitive improvement is clear from 2017 onwards, where ROE turns positive and peaks at 47.28% in 2018, suggesting highly efficient use of equity capital. Following this peak, ROE stabilizes in the 20-30% range through 2023, before dropping to -3.26% in 2024, mirroring the negative net income in that year.

Overall, the company has transitioned from a period of high losses and negative returns to a phase of substantial profitability and equity growth beginning around 2016. The improved ROE during these later years indicates enhanced capital management and profitable operations. The sudden decline in 2024 warrants further investigation as it interrupts a multi-year trend of financial gains.

Comparison to Competitors

Vertex Pharmaceuticals Inc., ROE, long-term trends, comparison to competitors

Microsoft Excel
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.
Dec 31, 2024
Dec 31, 2023
Dec 31, 2022
Dec 31, 2021
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Dec 31, 2019
Dec 31, 2018
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Dec 31, 2016
Dec 31, 2015
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Dec 31, 2013
Dec 31, 2012
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Dec 31, 2009
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Dec 31, 2005

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), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).

Comparison to Sector (Pharmaceuticals, Biotechnology & Life Sciences)

Vertex Pharmaceuticals Inc., ROE, long-term trends, comparison to sector (pharmaceuticals, biotechnology & life sciences)

Microsoft Excel
Vertex Pharmaceuticals Inc. Pharmaceuticals, Biotechnology & Life Sciences
Dec 31, 2024
Dec 31, 2023
Dec 31, 2022
Dec 31, 2021
Dec 31, 2020
Dec 31, 2019
Dec 31, 2018
Dec 31, 2017
Dec 31, 2016
Dec 31, 2015
Dec 31, 2014
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
Dec 31, 2010
Dec 31, 2009
Dec 31, 2008
Dec 31, 2007
Dec 31, 2006
Dec 31, 2005

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), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).

Comparison to Industry (Health Care)

Vertex Pharmaceuticals Inc., ROE, long-term trends, comparison to industry (health care)

Microsoft Excel
Vertex Pharmaceuticals Inc. Health Care
Dec 31, 2024
Dec 31, 2023
Dec 31, 2022
Dec 31, 2021
Dec 31, 2020
Dec 31, 2019
Dec 31, 2018
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Dec 31, 2006
Dec 31, 2005

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), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).