Vertex (VERX) Stock: Founder "Re-Entry" & The AI Tax Pivot 2026

Vertex, Inc. (NASDAQ: VERX) 
$12.81 (+5.96%) — As of Feb 19, 2026, 4:00 PM ET

Let’s be honest: “enterprise tax software” doesn’t exactly scream thrill ride. No confetti. No rockets. No meme coins. And yet… Vertex (VERX) might be quietly setting up one of the more interesting “boring is beautiful” comeback stories in SaaS.

Founded in 1978 and headquartered in King of Prussia, Pennsylvania (yes, that’s a real place), Vertex sits at the unglamorous but absolutely essential intersection of tax determination, compliance, e-invoicing, and enterprise workflow. Over 60% of the Fortune 500 rely on Vertex to not accidentally commit tax crimes in dozens of jurisdictions. That’s not sexy. That’s sticky.

And sticky businesses, when they pivot well, tend to make investors very happy. 😏

🎯 Trigger #1: The Founder’s “Sell High, Buy Low” Plot Twist

This is the kind of insider move that makes quants sit up and spill their coffee ☕.

• In June 2025, Jeffrey Westphal (Founder, former CEO & Chairman) sold ~3 million shares at $38.45, cashing out over $115 million.

• Fast-forward to February 13, 2026:
  👉 Westphal buys back 397,740 shares at $12.88 for $5.1M.

Let’s translate that into human language:

He sold near the top.
He’s buying near the floor.
With real money. Not vibes. 💰

That’s not a casual “confidence trade.” That’s a “the market has over-punished this” statement.

🏦 Trigger #2: Institutions Own… More Than the Company?

Yes, really.

• 111% of shares held by institutions

• 120% of float held

• Top holders include Vanguard ( 10.79% of shares outstanding), UBS, BlackRock, Wellington, Neuberger, MFS and friends.

“How is that even possible?” you ask.

It usually happens when short sellers borrow shares, sell them, and those same shares get counted again in ownership stats. Translation:

📌 There’s heavy institutional conviction
📌 There’s meaningful short interest
📌 And that combo can turn into a very spicy squeeze 🌶️ if fundamentals improve

Right now, about 11% of the stock is shorted. That’s not “apocalyptic bear case” territory—but it is enough fuel to matter if sentiment flips.

🔍 For Vertex (VERX)'s Institutional Ownership breakdown, see here. 

🐻 Trigger #3: Shorts Are Lurking (But That’s Not Always Bad)

• Short interest: ~10.98%

• Days to cover: ~3

Bears are betting that:

• Growth slows

• AI hype disappoints

• Or Vertex keeps bleeding smaller customers

Bulls are betting that:

• The AI + e-invoicing cycle reaccelerates growth

• Enterprise expansion offsets small-account churn

• And the valuation reset already priced in the bad news

This is what we call a proper battlefield stock ⚔️.

📈 Trigger #4: Analysts Are Cautiously (Very Cautiously) Optimistic

As of Feb 2026, the Street sits in Buy / Moderate Buy territory:

• Roughly 50–60% Buy / Strong Buy

• The rest mostly Hold

• Focus areas:

  • AI integration (“Vertex Copilot”) 🤖

  • E-invoicing mandates in Europe 🇪🇺

  • Execution vs guidance credibility 📊

In other words:
Wall Street wants proof, not promises. Fair enough.

🧨 Trigger #5: The Stock Is Down ~79% From Its Peak

• ATH: $60.71 (Feb 2025)

• Now: ~$12–13

That’s not a pullback. That’s a full emotional cleanse.

This is where:

• Weak hands are gone

• Long-term holders are grumpy

• And contrarians start sniffing around like truffle pigs 🐖🍄

Even a partial retracement could be meaningful.

💰 Trigger #6: Valuation—From “Tech Darling” to “Clearance Rack”

Price-to-Sales went from ~13x at the peak to roughly ~2.5–3x today.

Yes, the P/E looks insane—but that’s because earnings are still in “just turned positive” mode. The denominator is tiny. That’s what happens in pivot phases.

What matters more:

• Cloud revenue growing ~23% YoY ☁️

• ARR up ~11% 📈

• Free cash flow still solid 💵

• And EBITDA margins holding ~21–22%

This isn’t a broken business. It’s a transitioning one.

🧠 Trigger #7: The AI + E-Invoicing Pivot Is Real

From the latest earnings:

• 2025 revenue: $748M (+12.2% YoY)

• Cloud revenue: +27.9% YoY

• ARR: $671M (+11.3%)

• Net income: +$7.2M (from -$52.7M prior year)

• Adjusted EBITDA: $161.5M

Key narrative shifts:

✅ New logo growth ~20%
⚠️ Higher churn in smaller accounts
🚀 Strong enterprise expansion
🤖 AI products like Vertex Copilot gaining traction
🇫🇷🇩🇪 E-invoicing mandates in Europe = structural tailwind

Vertex is deliberately trading small, messy customers for big, sticky whales 🐋.

That hurts NRR in the short term. It often helps margins and durability in the long term.

👉 Want the full picture? Dive into Vertex (VERX)'s financials here.

🧩 The FUNanc1al Scorecard

🧠 Food for Thought: The Cross-Hub Connection

Think about this in FunTech + FunBusiness + FunRegulation terms:

• AI is not killing compliance. It’s supercharging it.

• Governments are mandating more digital reporting, not less.

• Global commerce = more tax complexity, not less.

Vertex doesn’t sell “software.” It sells permission to operate safely at scale. That’s not cyclical hype. That’s structural necessity.

In a world of AI agents, global marketplaces, and real-time tax enforcement, the plumbing gets more valuable, not less.

🧾 FAQ

Is VERX profitable yet?
Yes, just barely on a GAAP basis, and solidly on a non-GAAP/EBITDA basis. It’s in the early profitability phase.

Why did the stock crash so hard?
Guidance resets, growth deceleration fears, small-account churn, and multiple compression from peak SaaS mania.

Who are the main competitors?
Avalara, TaxJar, and in-house ERP solutions—plus the eternal enemy: spreadsheets from hell.

What’s the bull case?
AI + e-invoicing + enterprise focus = re-accelerating growth with better margins.

What’s the bear case?
Execution risk, customer churn, slower ERP cycles, and “AI” failing to move the needle fast enough.

💡💡💡 Curious about another deep oil exploration play?
Check our take on UnitedHealth Group.

⚡ Quick Take / TL;DR

• Founder sold high, now buying low with $5M of his own money

• Institutions are crowding the stock

• Shorts are active = potential squeeze fuel

• Business is pivoting to AI + cloud + e-invoicing

• Stock is ~79% below peak with a much saner valuation

• High upside, real volatility, execution matters a lot

This is a “show me” turnaround with asymmetric payoff if it works.

A fine is a tax for doing wrong; a tax is a fine for doing well. Vertex helps companies "do well" without getting fined. It’s a "sticky" business that’s too boring for the masses but potentially too cheap for the smart money to ignore.

👤 About the Author

Frédéric Marsanne is the founder of FUNanc1al — part market analyst, part storyteller, part accidental comedian. A longtime investor, entrepreneur, and venture-builder across tech, biotech, and fintech, he blends sharp insights with a twist of humor to help readers laugh, learn, live better lives, and invest a little wiser. When not decoding insider buys or poking fun at earnings calls, he’s building Cl1Q, writing fiction, painting, or discovering new passions to FUNalize.

🧾⚠️📢 Fun(anc1al) but Serious Disclaimer: 🧾⚠️📢

This article is for educational and entertainment purposes only and does not constitute financial advice. Investing involves risk, including the risk of permanent capital loss. Stocks are volatile, and even founders can be wrong. Always do your own research, know your risk tolerance, and consult a licensed financial professional if needed. 

Past performance is not indicative of future results. Resist FOMO and never invest money you can’t afford to lose. 

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