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Shares of IQVIA Holdings Inc. IQV scaled a 52-week high of $180.77 in the trading session on Nov 9, before closing a tad lower at $173.66.
The company’s shares have charted a solid trajectory, appreciating 12.4% year to date, ahead of 1.1% growth of the industry it belongs to and 9.4% rally of the Zacks S&P 500 composite.
Notably, IQVIA has witnessed a 0.1% rise in share price since it posted third-quarter 2020 results.
Let’s find out what’s supporting the uptick.
Upbeat 2020 Guidance
IQVIA raised its 2020 guidance. The company now projects adjusted earnings between $6.25 and $6.35 compared with the prior guidance of $6.10 and $6.30 per share. The current Zacks Consensus Estimate of $6.29 lies within the updated guidance.
Revenues are now expected within $11.1-$11.25 billion compared with the prior guidance of $11 billion to $11.1 billion. The current Zacks Consensus Estimate of $11.21 billion is within the updated guidance.
Adjusted EBITDA is now anticipated between $2,335 million and $2,360 million compared with the prior-guided range of $2,295-$2,345 million.
Consecutive Earnings & Revenue Beat
IQVIA Holdings came up with better-than-expected earnings and revenue performance in all four quarters of 2019 as well as in the first three quarters of 2020. The company’s bottom line continued to benefit from improvement in operational efficiency and decline in interest expenses. Strength across the company’s Technology & Analytics Solutions segment boosts the top line.
Shareholder Friendly Moves
IQVIA Holdings’ consistent efforts in rewarding its shareholders through share repurchases indicate the company’s commitment to create value for shareholders and underline its confidence in its business. These initiatives not only instill investors’ confidence but also positively impact earnings per share.
Considering the consistent demand for its offerings, solid liquidity and strong free cash flow performance, IQVIA reinstated its share-repurchase program, which it had suspended in the wake of the pandemic. During the first nine months of 2020, IQVIA Holdings repurchased shares worth $346 million. As of Sep 30, 2020, the company had nearly $1.0 billion of share-repurchase authorization remaining.
Zacks Rank and Stocks to Consider
IQVIA Holdings currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are ICF International ICFI, Automatic Data Processing ADP and Insperity NSP, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term expected earnings per share (three to five years) growth rate for ICF International, Automatic Data Processing and Insperity is 10%, 12% and 15%, respectively.
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