Vertex (VERX) is down 35% YTD. TD Cowen just initiated with a Buy and a $14 target, pointing to double-digit revenue growth through 2028 and a compressed valuation.
Vertex, Inc. (NASDAQ:VERX) is down more than 35% year-to-date. That drawdown has put the stock on the radar of at least one Street analyst who sees a disconnect between the price and the underlying business trajectory.
TD Cowen initiated coverage on June 29 with a Buy rating and a $14 price target. The firm described Vertex as a leading global indirect tax and e-invoicing software vendor. The call rests on a simple premise: consensus expectations are reasonable, the valuation has been compressed by recent underperformance, and execution alone could shift sentiment. TD Cowen expects Vertex to sustain double-digit revenue growth through at least fiscal 2028.
The initiation followed first-quarter 2026 results Vertex reported in May. Total revenue came in at $196.6 million, up 11.1% year-over-year. Adjusted EBITDA of $44.1 million landed above the high end of the company's own guidance. CEO Chris Young said the quarter showed stability across customer demand and retention despite a mixed macro environment.
During the quarter, Vertex acquired Brinta, an AI-first e-invoicing startup based in Latin America. Young said the deal will speed up country coverage in the region with AI-native compliance architecture. He also pointed to the company's April Value Creation Plan, a cost-and-efficiency program designed to boost profitability and free cash flow.
Full-year 2026 revenue guidance sits at $823.5 million to $831.5 million, with cloud revenue growth pegged at 25%. CFO John Schwab said cost actions from the Value Creation Plan are expected to save $60 million to $70 million annually beginning in 2027.
The stock's 35% decline this year has pushed the valuation into a range where a double-digit revenue grower with improving margins looks cheap relative to its own history. The question is whether the market is pricing in a slowdown that never materializes, or whether the tax software cycle is genuinely turning. TD Cowen's initiation is a bet on the former.
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