We publish no single base value for Vertex Pharmaceuticals. Our valuation methods put it between $435.58 and $483.03 a share. The valuation code's reason: no point fair value: the two anchors behind it compound the same growth rate and differ only in how they end — a perpetuity at the terminal rate against a multiple on the final year — so the midpoint between them measures terminal treatment rather than what the business is worth. The published range is the same reading with the false precision removed: read it as the span the method supports, and treat neither edge as a point estimate.
| Method | Value | vs price | Basis |
|---|---|---|---|
| Discounted cash flow | $483.03 | -11.0% | free cash flow $3.20bn, growth 10.79% for 5 years, then fading to 3% over 5 more, discounted at 7.47%; plus net cash $13.10 a share; stress floor $243.49 |
| Exit multiple (P/E) | $435.58 | -19.7% | earnings per share $18.12 valued at 24.23× (the stock's own median P/E) in 5 years, discounted back |
| Sum of the parts | — | — | no sum of the parts: this run holds no segment disclosure for the name |
| Price to sales | — | — | not reached: the cash-flow or earnings methods produced an anchor, so this fallback was not run |
| Tangible book | — | — | used only for lenders, where book value is the business |
| Price to FFO (REITs) | — | — | used only for REITs |
Each working is rebuilt by code from the valuation's own figures and checked against the published value.
The discount rate:
| Risk-free rate | 5.13% (10-year US Treasury yield) |
| Company's own beta | 0.28 (5 years of monthly returns against the S&P 500; standard error 0.21) |
| Peer beta | 0.35 (median of 7 S&P 500 Biotechnology companies) |
| Blend of own and peers | 0.29 (84% own, 16% peers, weighted by how precisely the company's own beta is measured) |
| Adjusted beta | 0.52 (0.67 × 0.29 + 0.33, pulled toward the market's 1.0) |
| Equity risk premium | 4.5% |
| Discount rate = risk-free + adjusted beta × premium | 7.47% |
Free cash flow grows 10.79% a year for 5 years, then fades in equal steps toward 3% over 5 more; each year is discounted by 1 ÷ (1 + rate)^year:
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Now | — | $3.20bn | — | — |
| Year 1 | 10.79% | $3.55bn | 0.9305 | $3.30bn |
| Year 2 | 10.79% | $3.93bn | 0.8658 | $3.40bn |
| Year 3 | 10.79% | $4.35bn | 0.8056 | $3.51bn |
| Year 4 | 10.79% | $4.82bn | 0.7496 | $3.62bn |
| Year 5 | 10.79% | $5.35bn | 0.6975 | $3.73bn |
| Year 6 | 9.49% | $5.85bn | 0.6490 | $3.80bn |
| Year 7 | 8.19% | $6.33bn | 0.6039 | $3.82bn |
| Year 8 | 6.89% | $6.77bn | 0.5620 | $3.80bn |
| Year 9 | 5.60% | $7.15bn | 0.5229 | $3.74bn |
| Year 10 | 4.30% | $7.45bn | 0.4866 | $3.63bn |
| Terminal value = year-10 cash flow × (1 + 3%) ÷ (7.47% − 3%) | $171.78bn |
| Terminal value in today's money | $83.58bn |
| Present value of years 1–10 | $36.35bn |
| Total present value | $119.93bn |
| Shares outstanding | 255.20m |
| Cash flows per share = total ÷ shares | $469.93 |
| Plus net cash per share | $13.10 |
| Value per share | $483.03 |
How the DCF value moves with the discount rate and the starting growth (the middle cell is the published value):
| Discount rate | Growth 5.79% | Growth 10.79% | Growth 15.79% |
|---|---|---|---|
| 6.47% | — | $626.46 | $849.58 |
| 7.47% | — | $483.03 | $649.69 |
| 8.47% | $293.37 | $392.33 | $523.49 |
The same DCF at each beta, starting growth unchanged:
| Beta | Value | Discount rate | DCF value |
|---|---|---|---|
| Company's own beta | 0.28 | 6.39% | $641.61 |
| Peer beta | 0.35 | 6.71% | $585.76 |
| Adjusted beta (used) | 0.52 | 7.47% | $483.03 |
Earnings per share grow on the same fading path as the DCF:
| Year | Growth | Earnings per share |
|---|---|---|
| Now | — | $18.12 |
| Year 1 | 10.79% | $20.07 |
| Year 2 | 8.45% | $21.77 |
| Year 3 | 6.82% | $23.26 |
| Year 4 | 5.67% | $24.58 |
| Year 5 | 4.87% | $25.77 |
| Earnings per share in year 5 | $25.77 |
| Exit P/E (the stock's own median P/E) | 24.23× |
| Value in 5 years = earnings × P/E | $624.46 |
| Discounted at 7.47% over 5 years: ÷ 1.4336 | $435.58 |
We publish no single base value for Vertex Pharmaceuticals. Our valuation methods put it between $435.58 and $483.03 a share. The valuation code's reason: no point fair value: the two anchors behind it compound the same growth rate and differ only in how they end — a perpetuity at the terminal rate against a multiple on the final year — so the midpoint between them measures terminal treatment rather than what the business is worth. The published range is the same reading with the false precision removed: read it as the span the method supports, and treat neither edge as a point estimate.
One-year price simulation: a 10% chance the price is below $395.15 and a 10% chance it is above $799.20 in a year; a 55% chance it is higher than today's $542.62, from 27.34% volatility. The simulation assumes the price drifts up at our discount rate of 7.47% a year.
At $542.62 the price implies free cash flow growing 12.7% a year for five years and then fading toward 3% over five more; its revenue has grown 10.8%.
| Week | Price | Base value |
|---|---|---|
| 2 Oct 2026 | $504.73 | $361.74 |
| 9 Oct 2026 | $510.08 | $368.90 |
| 16 Oct 2026 | $499.74 | — |
| 23 Oct 2026 | $523.93 | — |
| 30 Oct 2026 | $558.88 | — |
| 6 Nov 2026 | $547.09 | — |
| 12 Nov 2026 | $542.62 | — |
Data as of 12 Nov 2026; financials to 30 Sep 2026. Sources: company filings via EODHD, SEC EDGAR, US Treasury. How these values are computed. Not investment advice.
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