Intrinsic value of Vertex Pharmaceuticals - VRTX

Previous Close

$166.67

  Intrinsic Value

$90.16

stock screener

  Rating & Target

sell

-46%

Previous close

$166.67

 
Intrinsic value

$90.16

 
Up/down potential

-46%

 
Rating

sell

We calculate the intrinsic value of VRTX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 42.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  38.20
  34.88
  31.89
  29.20
  26.78
  24.60
  22.64
  20.88
  19.29
  17.86
  16.58
  15.42
  14.38
  13.44
  12.60
  11.84
  11.15
  10.54
  9.98
  9.48
  9.04
  8.63
  8.27
  7.94
  7.65
  7.38
  7.15
  6.93
  6.74
  6.56
Revenue, $m
  3,439
  4,639
  6,118
  7,905
  10,022
  12,488
  15,316
  18,514
  22,086
  26,031
  30,346
  35,024
  40,060
  45,443
  51,167
  57,223
  63,604
  70,306
  77,325
  84,659
  92,309
  100,278
  108,571
  117,194
  126,157
  135,472
  145,151
  155,211
  165,668
  176,543
Variable operating expenses, $m
  2,938
  3,959
  5,220
  6,742
  8,545
  10,646
  13,054
  15,778
  18,821
  22,181
  25,849
  29,834
  34,123
  38,709
  43,585
  48,743
  54,179
  59,888
  65,866
  72,114
  78,630
  85,418
  92,481
  99,827
  107,462
  115,396
  123,641
  132,210
  141,118
  150,381
Fixed operating expenses, $m
  246
  252
  257
  263
  269
  275
  281
  287
  293
  300
  306
  313
  320
  327
  334
  341
  349
  357
  364
  372
  381
  389
  398
  406
  415
  424
  434
  443
  453
  463
Total operating expenses, $m
  3,184
  4,211
  5,477
  7,005
  8,814
  10,921
  13,335
  16,065
  19,114
  22,481
  26,155
  30,147
  34,443
  39,036
  43,919
  49,084
  54,528
  60,245
  66,230
  72,486
  79,011
  85,807
  92,879
  100,233
  107,877
  115,820
  124,075
  132,653
  141,571
  150,844
Operating income, $m
  255
  428
  641
  901
  1,209
  1,568
  1,981
  2,449
  2,972
  3,550
  4,191
  4,877
  5,617
  6,407
  7,248
  8,138
  9,077
  10,062
  11,094
  12,173
  13,299
  14,471
  15,692
  16,961
  18,280
  19,651
  21,076
  22,557
  24,097
  25,699
EBITDA, $m
  339
  537
  784
  1,082
  1,436
  1,850
  2,325
  2,863
  3,464
  4,129
  4,856
  5,646
  6,495
  7,404
  8,371
  9,394
  10,472
  11,604
  12,791
  14,030
  15,324
  16,671
  18,073
  19,531
  21,047
  22,623
  24,260
  25,962
  27,731
  29,571
Interest expense (income), $m
  84
  49
  94
  152
  223
  309
  410
  529
  665
  818
  990
  1,179
  1,386
  1,611
  1,853
  2,112
  2,386
  2,677
  2,984
  3,306
  3,643
  3,995
  4,362
  4,745
  5,143
  5,558
  5,988
  6,435
  6,900
  7,384
  7,886
Earnings before tax, $m
  207
  334
  490
  678
  900
  1,158
  1,452
  1,784
  2,154
  2,560
  3,012
  3,491
  4,006
  4,554
  5,137
  5,752
  6,399
  7,078
  7,789
  8,530
  9,304
  10,109
  10,946
  11,817
  12,722
  13,663
  14,641
  15,657
  16,714
  17,813
Tax expense, $m
  56
  90
  132
  183
  243
  313
  392
  482
  581
  691
  813
  943
  1,081
  1,230
  1,387
  1,553
  1,728
  1,911
  2,103
  2,303
  2,512
  2,729
  2,956
  3,191
  3,435
  3,689
  3,953
  4,227
  4,513
  4,810
Net income, $m
  151
  244
  358
  495
  657
  845
  1,060
  1,303
  1,572
  1,869
  2,198
  2,548
  2,924
  3,325
  3,750
  4,199
  4,672
  5,167
  5,686
  6,227
  6,792
  7,379
  7,991
  8,627
  9,287
  9,974
  10,688
  11,430
  12,201
  13,004

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  3,096
  4,175
  5,507
  7,115
  9,021
  11,241
  13,786
  16,664
  19,879
  23,430
  27,314
  31,525
  36,057
  40,903
  46,055
  51,506
  57,250
  63,282
  69,600
  76,201
  83,087
  90,259
  97,723
  105,485
  113,553
  121,937
  130,649
  139,704
  149,117
  158,904
Adjusted assets (=assets-cash), $m
  3,096
  4,175
  5,507
  7,115
  9,021
  11,241
  13,786
  16,664
  19,879
  23,430
  27,314
  31,525
  36,057
  40,903
  46,055
  51,506
  57,250
  63,282
  69,600
  76,201
  83,087
  90,259
  97,723
  105,485
  113,553
  121,937
  130,649
  139,704
  149,117
  158,904
Revenue / Adjusted assets
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
Average production assets, $m
  1,169
  1,577
  2,080
  2,688
  3,408
  4,246
  5,207
  6,295
  7,509
  8,850
  10,317
  11,908
  13,620
  15,451
  17,397
  19,456
  21,625
  23,904
  26,291
  28,784
  31,385
  34,095
  36,914
  39,846
  42,893
  46,060
  49,351
  52,772
  56,327
  60,024
Working capital, $m
  -313
  -422
  -557
  -719
  -912
  -1,136
  -1,394
  -1,685
  -2,010
  -2,369
  -2,761
  -3,187
  -3,645
  -4,135
  -4,656
  -5,207
  -5,788
  -6,398
  -7,037
  -7,704
  -8,400
  -9,125
  -9,880
  -10,665
  -11,480
  -12,328
  -13,209
  -14,124
  -15,076
  -16,065
Total debt, $m
  1,176
  1,897
  2,785
  3,857
  5,129
  6,609
  8,307
  10,227
  12,371
  14,739
  17,330
  20,139
  23,162
  26,394
  29,830
  33,466
  37,297
  41,321
  45,534
  49,938
  54,530
  59,314
  64,293
  69,470
  74,851
  80,443
  86,255
  92,294
  98,572
  105,101
Total liabilities, $m
  2,065
  2,785
  3,673
  4,746
  6,017
  7,497
  9,195
  11,115
  13,259
  15,628
  18,218
  21,027
  24,050
  27,282
  30,719
  34,354
  38,186
  42,209
  46,423
  50,826
  55,419
  60,203
  65,181
  70,358
  75,740
  81,332
  87,143
  93,183
  99,461
  105,989
Total equity, $m
  1,031
  1,390
  1,834
  2,369
  3,004
  3,743
  4,591
  5,549
  6,620
  7,802
  9,095
  10,498
  12,007
  13,621
  15,336
  17,151
  19,064
  21,073
  23,177
  25,375
  27,668
  30,056
  32,542
  35,126
  37,813
  40,605
  43,506
  46,521
  49,656
  52,915
Total liabilities and equity, $m
  3,096
  4,175
  5,507
  7,115
  9,021
  11,240
  13,786
  16,664
  19,879
  23,430
  27,313
  31,525
  36,057
  40,903
  46,055
  51,505
  57,250
  63,282
  69,600
  76,201
  83,087
  90,259
  97,723
  105,484
  113,553
  121,937
  130,649
  139,704
  149,117
  158,904
Debt-to-equity ratio
  1.140
  1.360
  1.520
  1.630
  1.710
  1.770
  1.810
  1.840
  1.870
  1.890
  1.910
  1.920
  1.930
  1.940
  1.950
  1.950
  1.960
  1.960
  1.960
  1.970
  1.970
  1.970
  1.980
  1.980
  1.980
  1.980
  1.980
  1.980
  1.990
  1.990
Adjusted equity ratio
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333
  0.333

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  151
  244
  358
  495
  657
  845
  1,060
  1,303
  1,572
  1,869
  2,198
  2,548
  2,924
  3,325
  3,750
  4,199
  4,672
  5,167
  5,686
  6,227
  6,792
  7,379
  7,991
  8,627
  9,287
  9,974
  10,688
  11,430
  12,201
  13,004
Depreciation, amort., depletion, $m
  83
  110
  142
  181
  228
  282
  344
  414
  492
  579
  666
  768
  879
  997
  1,122
  1,255
  1,395
  1,542
  1,696
  1,857
  2,025
  2,200
  2,382
  2,571
  2,767
  2,972
  3,184
  3,405
  3,634
  3,873
Funds from operations, $m
  234
  353
  500
  676
  885
  1,127
  1,404
  1,717
  2,065
  2,448
  2,864
  3,317
  3,803
  4,322
  4,872
  5,454
  6,067
  6,709
  7,382
  8,084
  8,817
  9,579
  10,372
  11,197
  12,055
  12,946
  13,872
  14,834
  15,835
  16,876
Change in working capital, $m
  -87
  -109
  -135
  -163
  -193
  -224
  -257
  -291
  -325
  -359
  -393
  -426
  -458
  -490
  -521
  -551
  -581
  -610
  -639
  -667
  -696
  -725
  -755
  -785
  -816
  -848
  -881
  -915
  -952
  -990
Cash from operations, $m
  321
  462
  634
  839
  1,077
  1,351
  1,661
  2,008
  2,390
  2,807
  3,257
  3,742
  4,261
  4,811
  5,393
  6,005
  6,647
  7,319
  8,021
  8,752
  9,513
  10,304
  11,127
  11,982
  12,870
  13,793
  14,753
  15,750
  16,787
  17,866
Maintenance CAPEX, $m
  -55
  -75
  -102
  -134
  -173
  -220
  -274
  -336
  -406
  -484
  -571
  -666
  -768
  -879
  -997
  -1,122
  -1,255
  -1,395
  -1,542
  -1,696
  -1,857
  -2,025
  -2,200
  -2,382
  -2,571
  -2,767
  -2,972
  -3,184
  -3,405
  -3,634
New CAPEX, $m
  -322
  -408
  -503
  -607
  -720
  -838
  -961
  -1,087
  -1,214
  -1,341
  -1,467
  -1,591
  -1,712
  -1,830
  -1,946
  -2,059
  -2,170
  -2,279
  -2,386
  -2,494
  -2,601
  -2,709
  -2,819
  -2,932
  -3,048
  -3,167
  -3,291
  -3,420
  -3,556
  -3,697
Cash from investing activities, $m
  -377
  -483
  -605
  -741
  -893
  -1,058
  -1,235
  -1,423
  -1,620
  -1,825
  -2,038
  -2,257
  -2,480
  -2,709
  -2,943
  -3,181
  -3,425
  -3,674
  -3,928
  -4,190
  -4,458
  -4,734
  -5,019
  -5,314
  -5,619
  -5,934
  -6,263
  -6,604
  -6,961
  -7,331
Free cash flow, $m
  -56
  -21
  30
  97
  184
  293
  426
  584
  769
  981
  1,219
  1,486
  1,781
  2,102
  2,450
  2,824
  3,223
  3,645
  4,092
  4,562
  5,055
  5,570
  6,108
  6,669
  7,252
  7,859
  8,490
  9,145
  9,827
  10,534
Issuance/(repayment) of debt, $m
  570
  720
  888
  1,073
  1,271
  1,480
  1,698
  1,920
  2,144
  2,368
  2,590
  2,809
  3,023
  3,232
  3,436
  3,636
  3,831
  4,024
  4,214
  4,403
  4,593
  4,784
  4,978
  5,177
  5,381
  5,592
  5,811
  6,040
  6,278
  6,528
Issuance/(repurchase) of shares, $m
  134
  116
  86
  41
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  704
  836
  974
  1,114
  1,271
  1,480
  1,698
  1,920
  2,144
  2,368
  2,590
  2,809
  3,023
  3,232
  3,436
  3,636
  3,831
  4,024
  4,214
  4,403
  4,593
  4,784
  4,978
  5,177
  5,381
  5,592
  5,811
  6,040
  6,278
  6,528
Total cash flow (excl. dividends), $m
  648
  815
  1,004
  1,210
  1,455
  1,774
  2,124
  2,504
  2,913
  3,350
  3,809
  4,295
  4,804
  5,334
  5,887
  6,460
  7,054
  7,669
  8,306
  8,965
  9,647
  10,354
  11,086
  11,846
  12,633
  13,451
  14,301
  15,185
  16,105
  17,063
Retained Cash Flow (-), $m
  -285
  -360
  -443
  -536
  -635
  -739
  -848
  -959
  -1,071
  -1,182
  -1,293
  -1,402
  -1,509
  -1,614
  -1,716
  -1,815
  -1,913
  -2,009
  -2,104
  -2,198
  -2,293
  -2,388
  -2,485
  -2,585
  -2,687
  -2,792
  -2,901
  -3,015
  -3,134
  -3,259
Prev. year cash balance distribution, $m
  1,283
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  1,646
  456
  560
  675
  821
  1,035
  1,276
  1,546
  1,843
  2,167
  2,516
  2,893
  3,294
  3,721
  4,171
  4,645
  5,141
  5,660
  6,202
  6,767
  7,354
  7,966
  8,601
  9,261
  9,947
  10,659
  11,400
  12,170
  12,970
  13,803
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  1,578
  417
  488
  556
  636
  751
  862
  966
  1,059
  1,136
  1,195
  1,234
  1,253
  1,249
  1,225
  1,180
  1,119
  1,042
  955
  860
  761
  661
  564
  472
  387
  311
  245
  188
  142
  104
Current shareholders' claim on cash, %
  98.2
  97.1
  96.5
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3
  96.3

Vertex Pharmaceuticals Incorporated is engaged in discovering, developing, manufacturing and commercializing medicines for serious diseases. The Company is focused on developing and commercializing therapies for the treatment of cystic fibrosis (CF) and advancing its research and development programs in other indications. The Company's marketed medicines are ORKAMBI and KALYDECO. ORKAMBI (lumacaftor in combination with ivacaftor) is approved as a treatment for patients having two copies (homozygous) of the Delta-F508 (F508del) mutation in their cystic fibrosis transmembrane conductance regulator (CFTR) gene. KALYDECO (ivacaftor) is approved for the treatment of CF patients having the G551D mutation or other specified mutations in their CFTR gene. The Company's development programs in the field of CF include Tezacaftor (VX-661), VX-152, VX-440, VX-659, VX-445 and VX-371. VX-152, VX-440, VX-659 and VX-445 are CFTR corrector compounds.

FINANCIAL RATIOS  of  Vertex Pharmaceuticals (VRTX)

Valuation Ratios
P/E Ratio -369.5
Price to Sales 24.3
Price to Book 35.8
Price to Tangible Book
Price to Cash Flow 175.4
Price to Free Cash Flow 231.2
Growth Rates
Sales Growth Rate 64.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 26.7%
Cap. Spend. - 3 Yr. Gr. Rate 2.2%
Financial Strength
Quick Ratio 4
Current Ratio 0.1
LT Debt to Equity 45.1%
Total Debt to Equity 72.7%
Interest Coverage 0
Management Effectiveness
Return On Assets -0.2%
Ret/ On Assets - 3 Yr. Avg. -16.1%
Return On Total Capital -6%
Ret/ On T. Cap. - 3 Yr. Avg. -25.2%
Return On Equity -10.7%
Return On Equity - 3 Yr. Avg. -42.2%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 87.8%
Gross Margin - 3 Yr. Avg. 89.9%
EBITDA Margin 4.6%
EBITDA Margin - 3 Yr. Avg. -46.4%
Operating Margin 0.6%
Oper. Margin - 3 Yr. Avg. -52.6%
Pre-Tax Margin -3.9%
Pre-Tax Margin - 3 Yr. Avg. -61.6%
Net Profit Margin -6.6%
Net Profit Margin - 3 Yr. Avg. -62.6%
Effective Tax Rate -25.4%
Eff/ Tax Rate - 3 Yr. Avg. -10.6%
Payout Ratio 0%

VRTX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the VRTX stock intrinsic value calculation we used $2488.652 million for the last fiscal year's total revenue generated by Vertex Pharmaceuticals. The default revenue input number comes from 0001 income statement of Vertex Pharmaceuticals. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our VRTX stock valuation model: a) initial revenue growth rate of 38.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for VRTX is calculated based on our internal credit rating of Vertex Pharmaceuticals, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Vertex Pharmaceuticals.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of VRTX stock the variable cost ratio is equal to 85.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $241 million in the base year in the intrinsic value calculation for VRTX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 8% for Vertex Pharmaceuticals.

Corporate tax rate of 27% is the nominal tax rate for Vertex Pharmaceuticals. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the VRTX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for VRTX are equal to 34%.

Life of production assets of 15.5 years is the average useful life of capital assets used in Vertex Pharmaceuticals operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for VRTX is equal to -9.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2028.579 million for Vertex Pharmaceuticals - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 254.83 million for Vertex Pharmaceuticals is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Vertex Pharmaceuticals at the current share price and the inputted number of shares is $42.5 billion.

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