Vertex, Inc. (VERX) Stock Analysis
Vertex, Inc.
▾ What's in the 39/100 risk score? (higher = riskier)
Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend). It excludes the the Altman Z score, whose retained-earnings input this filer does not report separately, which relies on a proxied (estimated) input. See the Financial Health section for the full balance-sheet read.
How to read VERX
We are not publishing an intrinsic value for this one — the section below says exactly why. Everything on this page that comes straight from the filings and the tape is still here; treat the missing valuation as a known gap, not as a verdict on the business.
-
1
Reported earnings & margins ↓
What the company actually reported — unaffected by the valuation being held.
-
2
Balance sheet & book value ↓
Assets, liabilities and equity as filed.
-
3
Who's selling & betting against it ↓
Insider and short-interest behaviour needs no valuation model.
The share count we read for VERX looks wrong — common for multi-class / founder-controlled filers that report shares per share-class. That makes per-share figures (including intrinsic value) misleading, so we suppressed them. The company's total financials below are sound.
What to use instead: Lean on the totals — revenue, net income, cash flow — and the balance sheet. Multi-class share counts are being corrected; once fixed, the per-share valuation returns automatically.
This note is only about the single DCF fair-value number — VERX's full financial statements, health scores, and written analysis are all below.
Quality & solvency checks
Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
The Z-score needs working capital, retained earnings, EBIT, sales and total assets from the latest balance sheet, and at least one of those isn't reported in machine-readable form here — common for foreign private issuers. We leave it blank rather than compute a distress verdict from an estimated input. It doesn't affect the reported figures in the financial tables below.
▾ The checks — what passed, what didn't (and what we couldn't measure)
-
✓ Positive net incomeNet income $7.2M in the latest year.
-
✓ Positive operating cash flowOperating cash flow $165.5M (was $164.8M the prior year).
-
✓ Cash flow backs up reported profitOperating cash flow $165.5M vs net income $7.2M.
-
✓ Return on assets improvingReturn on assets 0.6% vs -4.5% a year ago.
-
✓ Debt load (vs assets)Long-term debt is 26.6% of assets vs 28.7% a year ago ($337.5M now).
-
✗ Short-term liquidity (current ratio)Current ratio 0.98x vs 1.00x a year ago — below 1.0, a caution flag.Why this matters: The current ratio compares assets it can turn to cash within a year against bills due within a year. Below 1.0 means it may struggle to cover near-term obligations.
-
· Share count (dilution) (n/a — data not reported; not scored)
-
✓ Pricing power (gross margin)Gross margin 64.3% vs 63.9% a year ago.
-
✓ Sales per asset (asset turnover)Asset turnover 0.59x vs 0.57x a year ago.
Missing data is never counted as a pass or a fail — it's shown as n/a and excluded from the denominator. Each check compares the company against its own prior year.
A standard discounted cash flowDCF — Discounted Cash Flow — sums up all future cash a business will produce, adjusted for the fact that future dollars are worth less than dollars today.
Why it matters: It is the most fundamentally honest valuation method when applicable — but only works for companies with predictable, positive cash flow.
Reference: Best for: mature, profitable businesses. Fails for: pre-profit growth, banks, REITs.
Full explanation → valuation is not meaningful for Vertex, Inc. because while operating cash flow is positive, net income has only been positive in one of the last five years, indicating inconsistent profitability. Investors are likely focused on the company's consistent revenue growth and expanding gross margins, betting on its ability to scale profitability over time. The primary quantifiable risk is the current ratio being below 1, suggesting potential short-term liquidity challenges.
As of 2 months ago
Anatomy of a share
What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.
What you actually need to decide
Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.
- Consistent positive net income in upcoming quarters
- Improvement in the current ratio above 1
- Continued revenue growth rates above 15%
The trend, in plain numbers (2024 → 2025)
Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.
- Revenue grew +12% to $748.4M.
- Free cash flow rose to $107.8M.
- Swung to a profit of $7.2M (from a loss the prior year).
Nothing clearly worsening year-over-year.
Roughly flat: Gross margin held to 64% (+0 pts).
Management & Leadership
Vertex, Inc. is led by CEO David DeStefano, who has been with the company for many years, including as CFO before becoming CEO. The company was founded by Ray West, who serves as Chairman of the Board. This leadership team has guided Vertex through its growth and public offering.
What They Make
Vertex, Inc. provides tax technology solutions, including tax calculation, compliance, and reporting software. Its products are primarily used by large and medium-sized businesses to automate and manage their indirect tax processes.
End Markets
Revenue Drivers
Why Is It Priced Like This?
Why Customers Pay
What we use instead: earnings (P/E, EV/EBIT), book value (P/B) — computed from the figures this company does report, shown in the sections below. Those numbers are unaffected by the missing cash-flow data.
The market is pricing Vertex based on its consistent revenue growth of 15.2%/yr over four years and expanding gross margins, indicating a growing and efficient core business. Despite inconsistent net income, the positive and consistent operating cash flow suggests underlying business health, with investors likely anticipating future profit expansion as the company scales and matures.
Business Model & Valuation
How They Make Money
The company funds itself through operations, with stock-based compensation equaling 35% of pre-SBCSBC (Stock-Based Compensation) — Paying employees with company shares instead of cash.
Why it matters: It's a real cost — it dilutes your ownership — so we subtract it from free cash flow even though accounting rules add it back, which would otherwise flatter cash-heavy tech companies.
Reference: Can be 10–30% of revenue at high-growth software firms.
Full explanation → free cash flowFree Cash Flow (FCF) — Operating cash flow minus capital spending: cash left after a company covers operating costs, taxes and interest and reinvests in the business — but BEFORE repaying debt principal or paying dividends. The cash actually available to investors.
Why it matters: A company can show big profits on paper while burning through cash. FCF is what actually fills the bank account.
Reference: Healthy mature businesses convert 8–15% of revenue into FCF · Growth companies often negative
Full explanation →, indicating dilution as a financing component. It does not currently pay dividends or engage in significant buybacks.
Free Cash Flow DCF
Standard FCF DCF: positive free cash flow in a sector suited for cash-flow-based valuation. FCF negative in 2/5 years.
Show advanced inputs
| RevenueGrowth | 15.2% |
| HistoricalFcfGrowth | 82.3% |
| SectorDefault | 12.0% |
| BestEstimate | 14.2% |
| Method | blend(70% revenue_cagr, 30% sector) |
| GrowthBasis | total |
What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project product, services and recurring/cloud lines independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.
Maturity & Competitive Position
Moat Signals
Revenue has been consistently growing at 15.2%/yr over the last four years, from $426M to $748M.
Geography & Markets
Vertex, Inc. is headquartered in the US and serves a global customer base, though specific geographic revenue mix percentages are not available from current data sources.
Geographic Risks
Market Signals
These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.
Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
Reference: 30–70 normal · >70 overbought · <30 oversold
Full explanation → (14)52.8NeutralMomentum is balanced — neither overbought nor oversold.
Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
Reference: Line above signal = bullish momentum · below = bearish
Full explanation →BearishLine below signalThe fast trend is below the slow trend — short-term momentum is currently downward.
Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.
QUALITY
Data Quality & Risk Flags (7 notes — click to expand/collapse)
Guardrail Notes (7)
- Stock-based compensation equals 35% of pre-SBC free cash flow; FCF used here is net of SBC (a real shareholder-dilution cost), so it is lower than the headline GAAP cash-flow figure.
- Latest FCF ($0.1B) is 14.9x net income ($0.0B) - using 3yr avg FCF to reduce one-time inflation.
- Shares from unknown — per-share values may be less accurate.
- Illiquidity discount 25% applied (small/micro-cap — harder to exit, demand a margin).
- Shares/market cap missing or defaulted; per-share valuation unreliable.
- Shares defaulted to 1; IV is NOT meaningful — treat as data-unavailable.
- DATA UNAVAILABLE: per-share values suppressed due to missing/unreliable shares data.
FINANCIALS
Financial Statements (5-year tables — click to expand)
From Vertex, Inc.'s SEC filings (EDGAR).
Income (5yr)
| Year | Revenue | Net Income | EPS |
|---|---|---|---|
| 2025 | 748.4M | 7.2M | — |
| 2024 | 666.8M | -52.7M | — |
| 2023 | 572.4M | -13.1M | — |
| 2022 | 491.6M | -12.3M | — |
| 2021 | 425.5M | -1.5M | — |
Cash Flow (5yr)
| Year | Operating CF | CapEx | − SBC & adj. | Free Cash Flow |
|---|---|---|---|---|
| 2025 | 165.5M | — | 57.8M | 107.8M |
| 2024 | 164.8M | 71.8M | 47.4M | 45.6M |
| 2023 | 74.3M | 49.3M | 33.9M | -8.8M |
| 2022 | 63.8M | 45.5M | 19.7M | -1.4M |
| 2021 | 90.3M | 31.7M | 26.2M | 32.4M |
How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). Latest year: 165.5M − — − 57.8M (SBC & adj.) = 107.8M. This is the same owner-earnings FCF definition the valuation model uses, though the DCF's starting value is a trailing 3-year average, not this single year.
Balance Sheet
| Total Assets | 1.3B |
| Total Liabilities | 1.0B |
| Equity | 258.9M |
| Total Debt | 337.5M |