DCF Tool

VRTX

Vertex Pharmaceuticals, Inc. – Pharmaceutical Preparation Manufacturing
Vertex is a global biotechnology company that invests in scientific innovation to create transformative medicines for people with serious diseases. The company has multiple approved medicines that treat the underlying cause of cystic fibrosis (CF) - a rare, life-threatening genetic disease - and has several ongoing clinical and research programs in CF. Beyond CF, Vertex has a robust pipeline of investigational small molecule medicines in other serious diseases where it has deep insight into causal human biology, including pain, alpha-1 antitrypsin deficiency and APOL1-mediated kidney diseases. In addition, Vertex has a rapidly expanding pipeline of cell and genetic therapies for diseases such as sickle cell disease, beta thalassemia, Duchenne muscular dystrophy and type 1 diabetes mellitus.
Analysis Results
Intrinsic Value $2,010.44
Latest Price $302.27
Relative Value 85% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 41.3%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 3.3%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 41.3%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 4.76 4.6
2024 6.72 6.3
2025 9.5 8.63
2026 13.4 11.8
2027 19.0 16.2
Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 569 billion. This corresponds to a present value of 469 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 47.5 billion. Adding in the terminal value gives a total present value of 517 billion.

There are presently 257.0 million outstanding shares, so the intrinsic value per share is 2010.44.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 13,234,800,000
Current Cash 10,778,500,000
Current Liabilities 2,742,100,000
Current Debt 40,800,000
Non-Cash Working Capital (NCWC) -245,000,000
Change in NCWC -185,600,000
EBIT 4,365,400,000
Tax Provision 910,400,000
Depreciation and Amortization 148,300,000
Capital Expenditure -204,700,000
Unlevered Free Cash Flow 3,184,391,361
Current Assets 9,560,600,000
Current Cash 7,524,900,000
Current Liabilities 2,142,000,000
Current Debt 46,900,000
Non-Cash Working Capital (NCWC) -59,400,000
Change in NCWC 301,217,000
EBIT 2,779,000,000
Tax Provision 388,300,000
Depreciation and Amortization 125,600,000
Capital Expenditure -235,000,000
Unlevered Free Cash Flow 2,575,605,419
Current Assets 8,133,379,000
Current Cash 6,658,897,000
Current Liabilities 1,877,533,000
Current Debt 42,434,000
Non-Cash Working Capital (NCWC) -360,617,000
Change in NCWC -70,618,000
EBIT 2,869,390,000
Tax Provision 405,151,000
Depreciation and Amortization 109,515,000
Capital Expenditure -259,798,000
Unlevered Free Cash Flow 2,275,498,441
Current Assets 4,822,829,000
Current Cash 3,808,294,000
Current Liabilities 1,334,827,000
Current Debt 30,293,000
Non-Cash Working Capital (NCWC) -289,999,000
Change in NCWC 145,609,000
EBIT 1,202,025,000
Tax Provision 218,109,000
Depreciation and Amortization 106,941,000
Capital Expenditure -75,451,000
Unlevered Free Cash Flow 1,191,175,831
Current Assets 3,843,109,000
Current Cash 3,168,242,000
Current Liabilities 1,120,292,000
Current Debt 9,817,000
Non-Cash Working Capital (NCWC) -435,608,000
Change in NCWC -211,176,000
EBIT 663,966,000
Tax Provision -1,486,862,000
Depreciation and Amortization 72,420,000
Capital Expenditure -95,524,000
Unlevered Free Cash Flow 429,686,000
Current Assets 2,648,963,000
Current Cash 2,088,666,000
Current Liabilities 807,260,000
Current Debt 22,531,000
Non-Cash Working Capital (NCWC) -224,432,000
Change in NCWC -148,304,000
EBIT 392,829,000
Tax Provision -107,324,000
Depreciation and Amortization 61,397,000
Capital Expenditure -99,421,000
Unlevered Free Cash Flow 206,501,000
Current Assets 1,831,540,000
Current Cash 1,434,557,000
Current Liabilities 792,537,000
Current Debt 319,426,000
Non-Cash Working Capital (NCWC) -76,128,000
Change in NCWC -21,493,000
EBIT 11,198,000
Tax Provision 16,665,000
Depreciation and Amortization 61,398,000
Capital Expenditure -56,563,000
Unlevered Free Cash Flow -5,460,000
Current Assets 1,407,153,000
Current Cash 1,042,462,000
Current Liabilities 506,349,000
Current Debt 87,023,000
Non-Cash Working Capital (NCWC) -54,635,000
Change in NCWC 122,202,000
EBIT -464,673,000
Tax Provision 30,381,000
Depreciation and Amortization 62,343,000
Capital Expenditure -45,302,000
Unlevered Free Cash Flow -325,430,000
Current Assets 1,546,511,000
Current Cash 1,387,106,000
Current Liabilities 368,254,000
Current Debt 32,012,000
Non-Cash Working Capital (NCWC) -176,837,000
Change in NCWC 80,599,000
EBIT -641,487,000
Tax Provision 6,958,000
Depreciation and Amortization 63,257,000
Capital Expenditure -51,201,000
Unlevered Free Cash Flow -548,832,000
Current Assets 1,588,576,000
Current Cash 1,465,076,000
Current Liabilities 397,829,000
Current Debt 16,893,000
Non-Cash Working Capital (NCWC) -257,436,000
Change in NCWC -106,889,000
EBIT -199,427,000
Tax Provision -288,567,000
Depreciation and Amortization 48,365,000
Capital Expenditure -51,393,000
Unlevered Free Cash Flow -309,344,000
Current Assets 1,589,585,000
Current Cash 1,321,215,000
Current Liabilities 432,624,000
Current Debt 13,707,000
Non-Cash Working Capital (NCWC) -150,547,000
Change in NCWC -120,531,000
EBIT 4,176,000
Tax Provision 38,754,000
Depreciation and Amortization 38,191,000
Capital Expenditure -71,140,000
Unlevered Free Cash Flow -149,304,000

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