Vertex, Inc. (VERX): A Bull Case Theory

We came across a bullish thesis on Vertex, Inc. on Business Invest’s Substack by Francesco Ferrari. In this article, we will summarize the bulls’ thesis on VERX. Vertex, Inc.'s share was trading at $19.22 as of December 1st. VERX’s trailing P/E was 285.23 according to Yahoo Finance.

Vertex, Inc. (VERX) is a leading software provider specializing in tax technology solutions that integrate seamlessly with enterprise systems such as SAP and Oracle. Its core platform ensures accurate taxation across every transaction, enabling large multinational corporations to remain compliant with complex tax regulations spanning hundreds of jurisdictions worldwide. This vertical specialization has positioned Vertex as an indispensable partner for global enterprises managing intricate indirect tax obligations.

The company has delivered steady fundamentals, reflected in its 15.9% three-year revenue CAGR, 65% gross margins, and 9.9% free cash flow margins. With a return on invested capital of 7.7% and a low beta of 0.62, Vertex’s financial profile underscores its resilient, anti-fragile business model, capable of maintaining profitability and stability even amid cyclical downturns. Despite a difficult 2025 that resulted in flat equity performance—averaging a 0.6% CAGR over the past five years—the company’s underlying operations remain robust.

Its recurring revenue base, mission-critical software integration, and expansion opportunities in global compliance automation create long-term growth visibility. As tax regulations become increasingly dynamic and digital transformation accelerates across enterprises, Vertex stands to benefit from growing demand for scalable, compliant tax automation solutions. With a market capitalization of $4.12 billion and strong cash generation capacity, the company retains both strategic relevance and financial flexibility, making it a steady compounder within the enterprise software landscape despite short-term share price underperformance.

Previously we covered a bullish thesis on Okta, Inc. (OKTA) by Antonio Linares in December 2024, which highlighted its leadership in cloud identity management and AI-driven growth potential. The company’s stock price has depreciated approximately by 1.28% since our coverage.  The thesis still stands as Okta remains integral to secure digital identity infrastructure. Francesco Ferrari shares a similar perspective on Vertex, Inc. (VERX).

Vertex, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held VERX at the end of the second quarter which was 27 in the previous quarter. While we acknowledge the potential of VERX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.