VRTX Profit Margins
Gross, Operating & Net Margin Analysis for Vertex Pharmaceuticals Inc
Margin Quality
Excellent
Current Profit Margins
Gross Margin
86.2%
$10.35B gross profit
Operating Margin
34.8%
$4.17B operating income
Net Profit Margin
32.9%
$3.95B net income
5-Year Margin Trends
What Margins Indicate About VRTX
Business Quality
High gross margins above 50% suggest Vertex Pharmaceuticals Inc has strong pricing power and competitive advantages that allow premium pricing.
Operational Efficiency
Expanding operating margins show Vertex Pharmaceuticals Inc is improving operational leverage and cost management.
Profitability
Net margins above 15% demonstrate excellent profitability and suggest strong competitive positioning.
Investment Implications
Expanding margins across the board suggest improving business fundamentals, which often supports stock price appreciation.
Understanding Profit Margins
Gross Margin
(Revenue - Cost of Goods Sold) / Revenue. Measures pricing power and production efficiency before operating expenses.
Operating Margin
Operating Income / Revenue. Shows profitability from core operations after all operating expenses but before interest and taxes.
Net Profit Margin
Net Income / Revenue. The bottom line - shows how much profit the company keeps from each dollar of revenue after all expenses.
Analyze VRTX Profitability
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Frequently Asked Questions
What is VRTX's profit margin?
VRTX (Vertex Pharmaceuticals Inc) has a net profit margin of 32.9%, meaning the company keeps $0.3293976485880697 in profit for every dollar of revenue. This represents an improvement from the previous year's net margin of -4.9%.
What is VRTX's gross margin?
VRTX's gross margin is 86.2%. Gross margin measures the percentage of revenue remaining after subtracting the cost of goods sold. A high gross margin like this indicates strong pricing power and efficient production.
What is VRTX's operating margin?
VRTX has an operating margin of 34.8%. Operating margin shows profitability after operating expenses but before interest and taxes. The 34.8% year-over-year improvement suggests better operational efficiency.
Are VRTX's profit margins good?
VRTX's margins are considered excellent. With a gross margin of 86.2% and net margin of 32.9%, Vertex Pharmaceuticals Inc demonstrates strong pricing power and operational efficiency.
How do profit margins affect VRTX stock?
Profit margins are a key indicator of VRTX's business quality and competitive position. High margins suggest strong competitive advantages and pricing power, which typically support premium valuations. Expanding margins often lead to stock price appreciation, while contracting margins can signal competitive pressures.
What drives VRTX's profit margins?
VRTX's profit margins are influenced by several factors: pricing power vs competitors, operational efficiency, scale advantages, input costs (materials, labor), Biotechnology-specific dynamics, and management execution. The significant expansion in gross margin suggests changes in these underlying drivers.
Disclaimer: Margin analysis is based on reported financial statements and should be compared to industry peers for context. Different sectors have structurally different margin profiles. This information is for educational purposes only and should not be considered financial advice.