IQVIA Holdings Inc. IQV is gaining momentum from its solid technological suite. The company offers an extensive range of technology solutions in the form of cloud-based applications and related services.
A glimpse of the company’s price performance so far this year shows that it has gained 30.4% compared with the industry and the Zacks S&P 500 composite’s 12.5% and 14.5% growth, respectively.
Furthermore, IQVIA Holdings has a long-term expected earnings per share (three to five years) growth rate of 14%. The bottom line is expected to register 14.8% and 13.6% growth in 2019 and 2020 each.
IQVIA Holdings’ Software as a Service (“SaaS”) solution supports a vast range of clinical and commercial processes. By combining its database, healthcare expertise and therapeutic information collected from over 100 countries, the company creates its Global Market Insight offerings such as MIDAS, Analytics Link and Disease Insights. All these solutions and services are used by healthcare and pharmaceutical companies to organize, enhance and implement their clinical and commercial strategies in a coordinated manner. In 2018, the company secured notable awards and deals for its tech offerings from both new and old clients.
Moreover, IQVIA Holdings’ efforts to help its clients gain an accurate and deep understanding of the entire healthcare system and its related processing by providing access to real-world data are appreciable. Such efforts should help the company strengthen its foothold in the real-world business. Meanwhile, IQVIA Holdings continues to make significant investments in the expansion of its real-world platform and capabilities.
With its increasing presence in emerging markets, IQVIA Holdings should benefit from the evolving growth opportunities in the life sciences industry. Notably, the IQVIA Institute estimates that spending on pharmaceuticals in emerging markets will expand at a CAGR (compound annual growth rate) of 6% to 9% through 2022. On the back of the expanding global healthcare system, IQVIA Holdings is also hopeful of witnessing multiple acquisition opportunities across the industry. Life sciences organizations are also expected to commercialize their operations in emerging markets just as they did in developed markets.
Impressively, the company has been consistently rewarding its shareholders through share repurchases. During the first half of 2019, IQVIA Holdings repurchased shares worth $377 million. As of Jun 30, 2019, the company had roughly $1.9 billion of authorized shares available for repurchase. Last year, it had repurchased shares worth $1.41 billion. Such moves reflect the company’s commitment to create value for shareholders and underline its confidence in its business.
IQVIA Holdings is persistently witnessing higher interest expense due to rise in average debt outstanding, and increase in depreciation and amortization on the back of higher intangible asset balances as a result of acquisitions. This is likely to keep the bottom line under pressure going forward.
Additionally, global presence exposes the company to foreign currency exchange rate fluctuations. High debt might hinder its expansion plans in the future.
Zacks Rank & Stocks to Consider
IQVIA Holdings currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are FLEETCOR FLT, Huron Consulting HURN and Charles River Associates CRAI, each carrying a Zacks Rank #2 (Buy). Long-term expected earnings (three to five years) growth rate for FLEETCOR, Huron Consulting and Charles River Associates is 15.6%, 13.5% and 13%, respectively.
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