Operating Margin - Vertex Pharmaceuticals Inc (F:VX1)

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Price: 392.3 EUR 1.06%

Market Cap: 101.3B EUR

38.7%

Current

43%

Average

-4.2%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

38.7%

Operating Profit

4.5B

Revenue

11.7B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
US		Vertex Pharmaceuticals Inc NASDAQ:VRTX	117.6B USD	39%
FR		Pharnext SCA OTC:PNEXF	6T USD	-17 527%
US		Abbvie Inc NYSE:ABBV	406.3B USD	33%
US		Amgen Inc NASDAQ:AMGN	179.7B USD	34%
US		Gilead Sciences Inc NASDAQ:GILD	156.1B USD	39%
US	E	Epizyme Inc F:EPE	94.1B EUR	-370%
US		Regeneron Pharmaceuticals Inc NASDAQ:REGN	82.5B USD	28%
AU		CSL Ltd ASX:CSL	83B AUD	26%
US		Alnylam Pharmaceuticals Inc NASDAQ:ALNY	52.8B USD	8%
NL		argenx SE XBRU:ARGX	44B EUR	22%
US	S	Seagen Inc F:SGT	39.3B EUR	-33%

Vertex Pharmaceuticals Inc
Glance View

Economic Moat

Narrow

Market Cap

99.6B EUR

Industry

Biotechnology

In the bustling landscape of biotechnology, Vertex Pharmaceuticals Inc. stands out as a dynamic powerhouse that has deftly carved a niche in the complex domain of genetic therapies. Founded in 1989, the company initially embarked on a mission to revolutionize drug discovery through a cutting-edge rational drug design approach. Armed with an innovative spirit and a focus on niche markets, Vertex turned its attention towards cystic fibrosis—a life-shortening genetic disorder affecting the lungs and digestive system. The company’s breakthrough came with the development and approval of the first therapies that address the underlying cause of cystic fibrosis, rather than just alleviating symptoms. These products, including Kalydeco and Trikafta, have repositioned Vertex from a scrappy biotech upstart to a dominating force in the drug market as these life-changing treatments not only improve patient outcomes but also command premium pricing. Vertex’s business model brilliantly capitalizes on its deep investment in research and development, allowing it to maintain a robust pipeline that promises ongoing growth. By channeling a substantial portion of its revenue back into R&D, Vertex seeks to extend its therapeutic successes beyond cystic fibrosis into other serious diseases with high unmet needs, such as sickle cell disease and beta-thalassemia. This strategic reinvestment supports a cyclical framework of innovation—capitalize on current successes while laying down the groundwork for future therapies. With a singular focus on specialty drugs that target specific genetic mutations or pathways, Vertex not only thrives on the immediate financial returns of its blockbuster drugs but continually invests in scientifically ambitious endeavors, thus reinforcing its status as a leader in the precision medicine sector.

View VX1 Analysis

VX1 Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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US	Mastercard Inc NYSE:MA	Technology
US	UnitedHealth Group Inc NYSE:UNH	Health Care
US	Exxon Mobil Corp NYSE:XOM	Energy
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US	Walmart Inc NYSE:WMT	Retail
US	Verizon Communications Inc NYSE:VZ	Telecommunication
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	Walmart Inc NYSE:WMT	US
	Verizon Communications Inc NYSE:VZ	US
	Chevron Corp NYSE:CVX	US

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R	RaonSecure Co Ltd KOSDAQ:042510	9 140 KRW -1.3%
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	Berkshire Hathaway Inc NYSE:BRK.A	751 245.04 USD 0.09%
	Bank of America Corp NYSE:BAC	56.25 USD 0.5%
	Mastercard Inc NYSE:MA	579.45 USD 0.54%
	UnitedHealth Group Inc NYSE:UNH	327.58 USD 0.86%
	Exxon Mobil Corp NYSE:XOM	119.22 USD -0.17%

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	Weatherford International PLC NASDAQ:WFRD	78.1 USD -2.17%

Vertex Pharmaceuticals Inc
F:VX1