Vertex Pharmaceuticals Incorporated (VRTX) DCF Valuation
Transparent DCF models put Vertex Pharmaceuticals Incorporated (VRTX)'s fair value in a range of $167.80 – $409.38 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $436.96 sits above that range — by these conservative assumptions it looks richly valued; the reverse-DCF below is the better lens for a high-growth name.
Reverse DCF: at today's $436.96, the market is pricing in roughly +18.7%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of +4.0%. The price is betting on acceleration above its track record.
Current Price
$436.96
Fair-Value Range
$167.80 – $409.38
Market-Implied Growth
+18.7%/yr
vs +4.0% 5Y actual
VRTX DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $2.4B · 0.25B shares · net cash $3.2B
Estimated Fair Value
$167.80
-61.6% vs $436.96
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $436.96; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $206 | $215 | $227 | $241 | $258 |
| 9.0% | $178 | $185 | $193 | $202 | $213 |
| 10.0% | $158 | $162 | $168 | $174 | $181 |
| 11.0% | $141 | $145 | $149 | $153 | $158 |
| 12.0% | $128 | $131 | $134 | $137 | $141 |
About Vertex Pharmaceuticals Incorporated
Vertex Pharmaceuticals Incorporated is a leading biotechnology firm primarily focused on the discovery, advancement, and marketing of innovative treatments, particularly for cystic fibrosis (CF). The company offers a range of approved medications for CF patients, including SYMDEKO/SYMKEVI, ORKAMBI, and KALYDECO, which target specific mutations within the cystic fibrosis transmembrane conductance regulator gene. Additionally, they provide TRIKAFTA for individuals with CF aged six years and older who possess at least one F508del mutation. Beyond its established CF therapies, Vertex maintains a robust and diverse clinical pipeline. This includes VX-864, currently in Phase 2 for alpha-1 antitrypsin (AAT) deficiency; VX-147, also in Phase 2, addressing APOL1-mediated focal segmental glomerulosclerosis (FSGS) and other serious kidney conditions; VX-880, a potential treatment for Type 1 Diabetes undergoing Phase 1/2 trials; VX-548, a NaV1.8 inhibitor in Phase 2 for various forms of acute, neuropathic, and musculoskeletal pain; and CTX001, which is in Phase 3 development for severe sickle cell disease (SCD) and transfusion-dependent beta-thalassemia (TDT). The company distributes its pharmaceutical products through specialty pharmacies and distributors across the United States, while international sales are facilitated via a network of specialty distributors, retail chains, hospitals, and clinics. Vertex also engages in numerous strategic collaborations with partners such as Affinia Therapeutics, Arbor Biotechnologies, CRISPR Therapeutics, Kymera Therapeutics, Mammoth Biosciences, Moderna, Obsidian Therapeutics, Skyhawk Therapeutics, Ribometrix, Genomics plc, Merck KGaA, and X-Chem. Established in 1989, Vertex Pharmaceuticals is headquartered in Boston, Massachusetts.
- Sector
- Healthcare
- Industry
- Biotechnology
- CEO
- Reshma Kewalramani