Buffett Brain · Research note
Score updated 22 Oct 2026 · analysis from 10 Jun 2026
VRTX· Healthcare
Vertex Pharmaceuticals
Vertex Pharmaceuticals boasts strong margins and a solid ROIC, but its inconsistent profitability and high valuation raise concerns about long-term durability.
Buffett fit
Partial fit
Owner
71
Durability
35
Management
78
Price
24
Score updated 22 Oct 2026 · analysis from 10 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Healthcare stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned 100% of Vertex, I would focus on the continued success of TRIKAFTA and the advancement of the pipeline.
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The 10-year outlook for Vertex hinges on its ability to maintain its market position in cystic fibrosis and successfully launch new therapies.
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Vertex has managed to reduce its share count slightly over the past five years with a -0.19% CAGR, indicating some commitment to returning value to shareholders.
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The current of 26.2 and an yield of 2.81% indicate that the stock is priced for high growth, which may not be sustainable.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 17.7% is well above the sector top-quintile cutoff of 5.3%.
- 2 of 86.3% exceeds the sector top-quintile of 78.4%.
- 3 of 39.0% is significantly higher than the sector top-quintile of 5.7%.
- 4Net margin of 35.4% is far superior to the sector top-quintile of 3.0%.
Concerns
5- 1Durability score of 35 indicates significant risks to long-term profitability.
- 2EPS CAGR of 14.2% is promising, but the 5-year max decline of -114.8% raises alarms about stability.
- 3Valuation score of 24 suggests the stock is overpriced relative to its earnings potential.
- 4No consistent profitability over the last five years, with at least one loss year.
Price history
$525+185.8%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Vertex Pharmaceuticals generates revenue primarily from its cystic fibrosis therapies, including TRIKAFTA, which alone accounted for $4.6 billion of revenue in the last year. The company has a strong pipeline with several drugs in various stages of clinical trials. Overall, the unit economics appear favorable with an of 39%.
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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