Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Vertex Pharmaceuticals Inc., FCFE calculation
US$ in thousands
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).
The financial data reveals notable fluctuations in the cash flow metrics over the five-year period ending December 31, 2024.
- Net cash provided by (used in) operating activities
- This cash flow metric demonstrates an initial decline from 3,253,505 thousand US dollars in 2020 to 2,643,500 thousand US dollars in 2021, indicating a downward trend in operating cash generation. In 2022, there is a significant increase to 4,129,900 thousand US dollars, reflecting improved operational cash inflows. This is followed by a decrease in 2023 to 3,537,300 thousand US dollars. Notably, the figure turns negative in 2024, reaching -492,600 thousand US dollars, which signals a shift to cash outflow from operating activities, a potential area of concern regarding operational efficiency or cash management.
- Free cash flow to equity (FCFE)
- The free cash flow to equity follows a similar trajectory to operating cash flows but at slightly lower magnitudes throughout the period. Starting at 2,964,683 thousand US dollars in 2020, it declines in 2021 to 2,384,100 thousand US dollars, then increases sharply in 2022 to 3,839,700 thousand US dollars, suggesting stronger cash availability for equity holders. The amount decreases again to 3,292,000 thousand US dollars in 2023. Importantly, FCFE becomes negative in 2024, at -823,900 thousand US dollars, indicating that free cash flow available to shareholders is insufficient, which may result from higher capital expenditures, reduced operating returns, or other financial pressures.
Overall, the data underscores volatility in cash flows with a peak in 2022 followed by a decline through 2023 and a pronounced deterioration into negative territory in 2024. The transition to negative cash flows in both operating activities and FCFE in the latest period is a significant shift that warrants further scrutiny to understand the underlying causes and implications for liquidity and shareholder returns.
Price to FCFE Ratio, Current
Vertex Pharmaceuticals Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 256,797,187 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | (823,900) |
| FCFE per share | -3.21 |
| Current share price (P) | 468.85 |
| Valuation Ratio | |
| P/FCFE | — |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| AbbVie Inc. | 13.55 |
| Amgen Inc. | 25.88 |
| Bristol-Myers Squibb Co. | 3.97 |
| Danaher Corp. | 40.28 |
| Eli Lilly & Co. | 59.36 |
| Gilead Sciences Inc. | 11.56 |
| Johnson & Johnson | 12.63 |
| Merck & Co. Inc. | 10.26 |
| Pfizer Inc. | 54.50 |
| Regeneron Pharmaceuticals Inc. | 16.64 |
| Thermo Fisher Scientific Inc. | 33.36 |
| P/FCFE, Sector | |
| Pharmaceuticals, Biotechnology & Life Sciences | 18.79 |
| P/FCFE, Industry | |
| Health Care | 17.07 |
Based on: 10-K (reporting date: 2024-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Vertex Pharmaceuticals Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 256,789,869 | 258,307,816 | 257,091,441 | 254,576,691 | 259,960,062 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | (823,900) | 3,292,000) | 3,839,700) | 2,384,100) | 2,964,683) | |
| FCFE per share3 | -3.21 | 12.74 | 14.94 | 9.36 | 11.40 | |
| Share price1, 4 | 462.58 | 426.29 | 297.40 | 244.24 | 210.50 | |
| Valuation Ratio | ||||||
| P/FCFE5 | — | 33.45 | 19.91 | 26.08 | 18.46 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| AbbVie Inc. | 13.57 | 17.37 | 22.66 | 18.76 | 13.16 | |
| Amgen Inc. | 25.50 | 4.71 | 8.32 | 13.52 | 11.06 | |
| Bristol-Myers Squibb Co. | 4.74 | 7.52 | 22.85 | 16.17 | 7.80 | |
| Danaher Corp. | 40.83 | 53.08 | 32.04 | 20.75 | 44.62 | |
| Eli Lilly & Co. | 64.93 | 75.06 | 60.51 | 35.17 | 36.62 | |
| Gilead Sciences Inc. | 12.07 | 12.81 | 15.22 | 12.70 | 5.98 | |
| Johnson & Johnson | 12.67 | 24.31 | 16.73 | 23.28 | 15.60 | |
| Merck & Co. Inc. | 11.32 | 24.48 | 22.40 | 18.72 | 17.85 | |
| Pfizer Inc. | 55.28 | 3.82 | 10.56 | 8.88 | — | |
| Regeneron Pharmaceuticals Inc. | 21.27 | 26.52 | 19.29 | 10.35 | 13.30 | |
| Thermo Fisher Scientific Inc. | 41.23 | 31.16 | 27.98 | 13.44 | 18.58 | |
| P/FCFE, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 19.99 | 16.91 | 19.28 | 16.49 | 17.09 | |
| P/FCFE, Industry | ||||||
| Health Care | 18.69 | 17.15 | 18.11 | 18.05 | 17.25 | |
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.
3 2024 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= -823,900,000 ÷ 256,789,869 = -3.21
4 Closing price as at the filing date of Vertex Pharmaceuticals Inc. Annual Report.
5 2024 Calculation
P/FCFE = Share price ÷ FCFE per share
= 462.58 ÷ -3.21 = —
6 Click competitor name to see calculations.
The data reveals several notable trends in the financial performance and market valuation over the five-year period ending December 31, 2024.
- Share Price (US$)
- The share price exhibited a consistent upward trajectory throughout the period analyzed. Starting at $210.50 at the end of 2020, the share price increased steadily each year, reaching $462.58 by the end of 2024. This reflects a strong positive market sentiment and potentially increasing investor confidence in the company’s value.
- Free Cash Flow to Equity (FCFE) per Share (US$)
- FCFE per share showed more variability over the years. It started at $11.40 in 2020, decreased to $9.36 in 2021, then rose sharply to $14.94 in 2022. In 2023, FCFE per share declined again to $12.74, followed by a significant drop to a negative value of -$3.21 in 2024. This volatility points to fluctuations in the company’s free cash generating ability, with the negative figure in 2024 indicating a probable cash outflow to equity holders or a significant reduction in operating cash flows available after investments and debt payments.
- Price to FCFE Ratio (P/FCFE)
- The P/FCFE ratio increased from 18.46 in 2020 to 26.08 in 2021, then decreased to 19.91 in 2022 before rising sharply again to 33.45 in 2023. The ratio for 2024 is not provided, likely due to the negative FCFE that year making the ratio not meaningful or calculable. The fluctuations in the P/FCFE ratio suggest varying market expectations relative to the company's free cash flow generation. The sharp increase in 2023 indicates an elevated valuation relative to FCFE, possibly reflecting optimism about future growth or other fundamental factors despite the recent variability in cash flow.
Overall, the upward trend in share price contrasts with the irregular FCFE per share, particularly the decline into negative territory in 2024. The market appears to maintain a favorable view of the company's prospects, as reflected in the increased valuation multiples during most years, despite the challenges indicated by the cash flow dynamics. The divergence between share price and FCFE in the latest year suggests caution when interpreting market valuation solely through free cash flow metrics at this stage.