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Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
As of Mar. 2026, Vertex Pharmaceuticals has a Sloan Ratio of 5.42%, indicating the company is in the safe zone and there is no funny business with accruals.
Vertex Pharmaceuticals (MEX:VRTX) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Mar. 2026, Vertex Pharmaceuticals has a Sloan Ratio of 5.42%, indicating the company is in the safe zone and there is no funny business with accruals.
Vertex Pharmaceuticals Sloan Ratio % Related Terms
Vertex Pharmaceuticals Sloan Ratio % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
MEX:VRTX vs REGN, ALNY, RVMD: Sloan Ratio % Comparison
For the Biotechnology subindustry, Vertex Pharmaceuticals's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Vertex Pharmaceuticals Sloan Ratio % vs Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Vertex Pharmaceuticals's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Vertex Pharmaceuticals's Sloan Ratio % falls into.
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Vertex Pharmaceuticals's Sloan Ratio for the fiscal year that ended in Dec. 2025 is calculated as
Vertex Pharmaceuticals's Net Income for the trailing twelve months (TTM) ended in Mar. 2026 was 19448.681 (Jun. 2025 ) + 19864.934 (Sep. 2025 ) + 21446.589 (Dec. 2025 ) + 18598.927 (Mar. 2026 ) = MXN79,359 Mil.
Vertex Pharmaceuticals's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2026 was 20205.615 (Jun. 2025 ) + 22772.49 (Sep. 2025 ) + 8966.839 (Dec. 2025 ) + 25752.499 (Mar. 2026 ) = MXN77,697 Mil.
Vertex Pharmaceuticals's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2026 was -9122.747 (Jun. 2025 ) + -2146.271 (Sep. 2025 ) + -5187.442 (Dec. 2025 ) + -7788.323 (Mar. 2026 ) = MXN-24,245 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Vertex Pharmaceuticals (MEX:VRTX) has a Sloan Ratio % of 5.42% as of Mar. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Vertex Pharmaceuticals and its competitors.
Is Vertex Pharmaceuticals' Sloan Ratio % too high?
Vertex Pharmaceuticals' current Sloan Ratio % is 5.42%. Overall, Vertex Pharmaceuticals has a GF Score™ of 92/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Vertex Pharmaceuticals' Sloan Ratio % compare to REGN and ALNY?
Vertex Pharmaceuticals' Sloan Ratio % of 5.42% can be compared against companies in the Biotechnology industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for a Biotechnology company?
A good Sloan Ratio % depends on the Biotechnology industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Vertex Pharmaceuticals and its competitors. Vertex Pharmaceuticals's current Sloan Ratio % is 5.42%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Vertex Pharmaceuticals stock overvalued right now?
Based on GuruFocus' analysis, Vertex Pharmaceuticals (MEX:VRTX) is currently considered Fairly Valued. The stock's GF Value™ is MXN8,929.88, compared to a current price of MXN8,476.00 — trading 5.1% below its estimated fair value. The current Sloan Ratio % is 5.42%. Vertex Pharmaceuticals' overall GF Score™ is 92/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Vertex Pharmaceuticals (MEX:VRTX), the current Sloan Ratio % is 5.42% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Vertex Pharmaceuticals (MEX:VRTX) Overvalued in 2026?
Based on GuruFocus' analysis, Vertex Pharmaceuticals stock appears to be undervalued.
The current stock price of MXN8,476.00 is trading 5.1% below its estimated GF Value™ of MXN8,929.88.
GuruFocus considers Vertex Pharmaceuticals to be Fairly Valued.
Key valuation signals for MEX:VRTX:
Sloan Ratio %: 5.42%
GF Value™: MXN8,929.88 vs. price of MXN8,476.00 (5.1% below fair value)
No single metric tells the full story. See the MEX:VRTX stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Vertex Pharmaceuticals is a global biotechnology company that discovers and develops small-molecule drugs for the treatment of serious diseases. Its key drugs are Kalydeco, Orkambi, Symdeko, and Trikafta/Kaftrio, and Alyftrek for cystic fibrosis, where Vertex therapies remain the standard of care globally. Vertex has diversified its portfolio through Casgevy, a gene-editing therapy for beta thalassemia and sickle-cell disease, and Journavx, a non-opioid pain medication approved for the treatment of moderate-to-severe acute pain in adults. Additionally, Vertex is evaluating small-molecule inhibitors of APOL1-mediated kidney diseases. Vertex is also investigating cell therapies to deliver a potential functional cure for type 1 diabetes.
92GF Score
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