The Bullish Case for Vertex Pharmaceuticals (VRTX)

Over the 3-day weekend I was analyzing charts and noticed an ascending triangle pattern in Vertex Pharmaceuticals Inc.’s (VRTX) chart.  This is a bullish pattern, which means the stock could soon experience a breakout…

Vertex Pharmaceuticals Inc. (VRTX) discovers and develops small-molecule drugs for the treatment of serious diseases. Its key drugs are Kalydeco, Orkambi, Symdeko, and Trikafta for cystic fibrosis, where its therapies are the standard of care globally.

The company’s sales last year were driven by a fast adoption of Trikafta. The drug holds the key to VRTX’s long-term growth as it has the potential to treat close to 90% of cystic fibrosis patients. The company has consistently received regulatory approvals for the drug that has expanded its eligible population.

VRTX currently has a current ratio of 4.3, which indicates it has more than enough liquidity to handle short-term debt obligations. The company is also highly profitable with a net profit margin of 43.7%.

The company has seen both its revenue and earnings soar over the past year. Sales are up 28.8%, while earnings rose 78.5% over the past year. Even with all that growth, its stock is still trading at a reasonable valuation with a trailing P/E of 20.88 and a forward P/E of 18.83.

Though the stock has shown mixed performance as it’s down 10% for the year, but has still shown a recent uptrend.

Take a look at the 1-year chart of VRTX below with my added notations…

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