#7 - Vertex Pharmaceuticals (NASDAQ:VRTX)
The last biotech stock on our list is Vertex Pharmaceuticals (NASDAQ:VRTX). Vertex is the industry leader in the treatment of cystic fibrosis with four drug treatments on the market. And investors will appreciate that those treatments are capable of treating 90% of patients with cystic fibrosis. That gives the company a virtual monopoly in a huge addressable market.
In November, Vertex posted its third consecutive earnings report in which it beat both top and bottom-line estimates.
That being said, the stock is down 19% for the year despite being up 10% in the last month. This is creating an interesting dynamic in that VRTX stock is now approximately back to where it was after the market selloff to start the pandemic. This may be an example of investors simply rotating out of the segment and Vertex being caught in the wash.
Analysts give the stock a consensus price target of $255.12 which would give it a 23% upside from its current price.
About Vertex Pharmaceuticals
Vertex Pharmaceuticals Incorporated, a biotechnology company, engages in developing and commercializing therapies for treating cystic fibrosis (CF). It markets TRIKAFTA/KAFTRIO for people with CF with at least one F508del mutation for 2 years of age or older; SYMDEKO/SYMKEVI for people with CF for 6 years of age or older; ORKAMBI for CF patients 1 year or older; and KALYDECO for the treatment of patients with 1 year or older who have CF with ivacaftor.
Read More - Current Price
- $398.55
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 18 Buy Ratings, 10 Hold Ratings, 3 Sell Ratings.
- Consensus Price Target
- $494.04 (24.0% Upside)
The Warren Buffett missive to “be greedy when others are fearful” may not be completely accurate when it comes to biotech stocks. Many stocks in the sector are quality names that deserve a place in portfolios at any time.
However, it does serve as a reminder that the madness of crowds can apply to stocks that are on the way down just as quickly as stocks that are on the way up. That is, sometimes FOMO (Fear Of Missing Out) on the way up turns into simple fear on the way down.
But in that fear, there can be an opportunity. The biotech industry is offering some fascinating potential in the areas of gene editing and gene therapy. For risk-tolerant investors, this is likely to be an area where the strongest gains will be made.
However, there may still be some turbulence before we get there. The stocks in this presentation appear to have strong fundamental and/or technical cases that make them worthy of your consideration.
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