Over the past decade, Vertex Pharmaceuticals‘ (NASDAQ: VRTX) shares have outperformed those of its biotech peers. During that period, it returned nearly 449% compared to the sector benchmark, the iShares NASDAQ Biotechnology ETF (NASDAQ: IBB), and its return of 430%. However, the stock is now down almost 30% from all-time highs after it pulled the plug on an experimental treatment for hereditary liver diseases last October.
Investors are now wondering if Vertex stock’s run is over and it’s about to enter the decline phase. On the contrary, trading at just 22 times earnings, I think that Vertex has now become seriously undervalued. Here are three reasons why the stock is a strong buy now.