Stock Analysis on Net
Stock Analysis on Net

Vertex Pharmaceuticals Inc. (NASDAQ:VRTX)

Price to FCFE (P/FCFE)

Intermediate level


Free Cash Flow to Equity (FCFE)

Vertex Pharmaceuticals Inc., FCFE calculation

US$ in thousands

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income (loss) attributable to Vertex 1,176,810  2,096,896  263,484  (112,052) (556,334)
(Income) loss attributable to noncontrolling interest —  (9,793) (171,849) 28,021  (31,847)
Net noncash charges 458,621  (1,054,837) 738,043  322,204  308,699 
Changes in operating assets and liabilities (66,101) 238,020  15,264  (2,070) (85,950)
Net cash provided by (used in) operating activities 1,569,330  1,270,286  844,942  236,103  (365,432)
Expenditures for property and equipment (75,451) (95,524) (99,421) (56,563) (45,302)
Purchase of in-process research and development —  —  (160,000) —  — 
Payments on finance leases (39,185) (33,388) (19,336) (18,029) (20,335)
Proceeds related to capital lease and construction financing lease obligations 10,046  20,840  34,666  11,208  23,662 
Payments on revolving credit facility —  —  (300,000) —  — 
Payments on senior secured term loan —  —  —  (75,000) — 
Proceeds from revolving credit facility —  —  —  74,965  — 
Payments of debt issuance costs —  —  —  (3,103) — 
Free cash flow to equity (FCFE) 1,464,740  1,162,214  300,851  169,581  (407,407)

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-16).

Item Description The company
FCFE Free cash flow to equity is the cash flow available to Vertex Pharmaceuticals Inc.’s equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made. Vertex Pharmaceuticals Inc.’s FCFE increased from 2017 to 2018 and from 2018 to 2019.

Price to FCFE Ratio, Current

Vertex Pharmaceuticals Inc., current P/FCFE calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
No. shares of common stock outstanding 260,467,334
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands) 1,464,740 
FCFE per share 5.62
Current share price (P) 265.39
Valuation Ratio
P/FCFE 47.19
Benchmarks
P/FCFE, Competitors1
Abbott Laboratories 65.26
AbbVie Inc. 4.12
Amgen Inc. 36.11
Biogen Inc. 6.78
Bristol-Myers Squibb Co. 5.37
Eli Lilly & Co. 17.37
Gilead Sciences Inc. 14.64
Illumina Inc. 147.75
Johnson & Johnson 23.05
Merck & Co. Inc. 19.35
Pfizer Inc. 10.85
Regeneron Pharmaceuticals Inc. 29.53
Zoetis Inc. 57.64
P/FCFE, Sector
Pharmaceuticals & Biotechnology 13.71
P/FCFE, Industry
Health Care 15.26

Based on: 10-K (filing date: 2020-02-13).

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

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
No. shares of common stock outstanding1 259,268,593 255,656,889 253,891,984 248,438,127 246,391,955
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)2 1,464,740  1,162,214  300,851  169,581  (407,407)
FCFE per share3 5.65 4.55 1.18 0.68 -1.65
Share price1, 4 240.09 185.25 160.94 85.73 85.37
Valuation Ratio
P/FCFE5 42.50 40.75 135.82 125.60
Benchmarks
P/FCFE, Competitors6
Abbott Laboratories 53.19 70.38 5.13 18.90
AbbVie Inc. 3.64 7.33 19.98 8.15 3.73
Amgen Inc. 33.32 12.46 11.98 9.37 11.59
Biogen Inc. 9.16 12.11 34.09 15.05 6.58
Bristol-Myers Squibb Co. 5.80 18.62 20.01 52.51
Eli Lilly & Co. 15.87 35.28 11.27 14.04 52.66
Gilead Sciences Inc. 15.91 67.92 5.70 4.79 4.29
Illumina Inc. 149.01 27.24 57.76 65.66 85.02
Johnson & Johnson 23.06 24.90 14.21 14.18 16.84
Merck & Co. Inc. 18.08 22.76 43.01 24.26 9.61
Pfizer Inc. 10.09 18.96 16.06 12.30 12.81
Regeneron Pharmaceuticals Inc. 21.00 24.51 32.42 41.47 75.10
Zoetis Inc. 51.91 13.91 23.76 291.75 12.58
P/FCFE, Sector
Pharmaceuticals & Biotechnology 12.99 21.30 16.49 12.08 10.84
P/FCFE, Industry
Health Care 14.21 22.98 17.13 13.52 9.19

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-16).

1 Data adjusted for splits and stock dividends.

2 See details »

3 2019 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,464,740,000 ÷ 259,268,593 = 5.65

4 Closing price as at the filing date of Vertex Pharmaceuticals Inc.’s Annual Report.

5 2019 Calculation
P/FCFE = Share price ÷ FCFE per share
= 240.09 ÷ 5.65 = 42.50

6 Click competitor name to see calculations.

Valuation ratio Description The company
P/FCFE Price to free cash flow to equity is cash valuation indicator of stockholders’ equity. Vertex Pharmaceuticals Inc.’s P/FCFE ratio decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.