Vertex Pharmaceuticals - Comparative Multiple Analysis

Vertex Pharmaceuticals (Comparative Multiple Analysis)

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Notes on the Comparative Multiple Analysis of Vertex Pharmaceuticals

WikiWealth compares Vertex Pharmaceuticals's revenue, EBITDA, and EBIT multiples to their peers in order to determine the appropriate fair valuation. Click in the top right corner to experiment with Vertex Pharmaceuticals's comparative analysis.

Notes from the analysis:

1. WikiWealth uses quantitative measures to determine the multiple range for Vertex Pharmaceuticals.
2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to Vertex Pharmaceuticals's debt holders.
3. Multiples incorporate benefits due to economies of scale; WikiWealth compares absolute enterprise value multiples to competitor's multiples.
4. WikiWealth excludes outliers when calculating individual company multiples.

Helpful Information for Vertex Pharmaceuticals's Analysis


How does this work? The Comparative Investment Analysis determines the value of Vertex Pharmaceuticals by comparing Vertex Pharmaceuticals financial ratios, prices, growth rates, margins, etc. to those of relevant peer groups.

Value Investing Importance? This method is widely used by investment professionals to determine the correct price of investments, especially initial public offerings (IPOs). It is one element of WikiWealth's three Wall Street approaches used to determine the correct fair value of Vertex Pharmaceuticals.

See the Vertex Pharmaceuticals cash flow (DCF) analysis for a completely different approach that's popular on Wall Street for determining the value of an investment in Vertex Pharmaceuticals.

Also, see the Vertex Pharmaceuticals's buffett intrinsic valuation analysis for WikiWealth's attempt to replicate the investing formula's used by Warren Buffett and Vertex Pharmaceuticals's valuation conclusion for a quick summary.