IQVIA (IQV) Up 2.5% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for IQVIA Holdings (IQV). Shares have added about 2.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is IQVIA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
IQVIA Surpasses Q2 Earnings & Revenues Estimates
IQVIA Holdings reported solid second-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share (excluding 84 cents from non-recurring items) of $2.43 beat the Zacks Consensus Estimate by 2.5% but declined marginally on a year-over-year basis. Total revenues of $3,728 million also outpaced the Zacks Consensus Estimate marginally. The top line increased 5.3% year over year on a reported basis and 5.5% on a constant-currency basis.
Revenue Details and Operating Performance
Revenues from Technology & Analytics Solutions amounted to $1,456 million. The metric rose 3.4% on both reported basis and at constant currency. Research & Development Solutions’ revenues of $2,096 million increased 7.5% on a reported basis and 7.6% on a constant-currency basis. Revenues from Contract Sales & Medical Solutions totaled $176 million, down 3.8% on a reported basis and was flat at constant currency. Adjusted EBITDA was $864 million, up 8% year over year.
Balance Sheet and Cash Flow
IQVIA exited second-quarter 2023 with cash and cash equivalents of $1,382 million compared with $1,494 million at the end of the prior quarter. Long-term debt (less current portion) was $11,833 million compared with $12,433 million at the prior-quarter end. IQV generated $402 million of cash from operating activities in the reported quarter while capital expenditure was $160 million. Free cash flow was $242 million. In the second quarter of 2023, IQV repurchased shares worth $490 million. As of Jun 30, 2023, IQVIA had $736 million of share repurchase authorization available.
Q3 Guidance
For the third quarter of 2023, IQV expects revenues to be between $3,760 million and $3,810 million, indicating growth of 5.6-7.0% on a reported basis and 3.9-5.3% at constant currency. IQV anticipates adjusted EBITDA in the range of $880-$895 million, suggesting a rise of 8.1-10.0%. Adjusted earnings per share are expected to be between $2.39 and $2.49, implying a decline of 3.6% to an improvement of 0.4% on a reported basis.
2023 Guidance
IQVIA expects revenues to be between $15,050 million and $15,175 million (prior view: $15.15 billion and $15.40 billion), hinting at a jump of 4.4-5.3% on a reported basis and 4.1-5% at constant currency (earlier guidance: 5.1-6.9% on a reported basis and 4.7-6.5% at constant currency). Adjusted earnings per share are estimated to be between $10.2 and $10.45 (prior view: $10.26 and $10.56). Adjusted EBITDA is anticipated to be between $3.6 billion and $3.635 billion (prior view: $3.625 billion and $3.695 billion).
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -6.25% due to these changes.
VGM Scores
Currently, IQVIA has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, IQVIA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
IQVIA is part of the Zacks Technology Services industry. Over the past month, Nov Inc. (NOV), a stock from the same industry, has gained 5.4%. The company reported its results for the quarter ended June 2023 more than a month ago.
Nov Inc. reported revenues of $2.09 billion in the last reported quarter, representing a year-over-year change of +21.2%. EPS of $0.39 for the same period compares with $0.18 a year ago.
For the current quarter, Nov Inc. is expected to post earnings of $0.35 per share, indicating a change of +337.5% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.5% over the last 30 days.
Nov Inc. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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IQVIA Holdings Inc. (IQV) : Free Stock Analysis Report
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