IQVIA (IQV) Up 5.3% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for IQVIA Holdings (IQV). Shares have added about 5.3% 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 its most recent earnings report in order to get a better handle on the important drivers.
IQVIA Surpasses Q4 Earnings Estimates
IQVIA Holdings Analytics Inc. reported mixed fourth-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings (excluding 11 cents from non-recurring items) were $2.84 per share, beating the Zacks Consensus Estimate by a slight margin and increasing 4.3% from the year-ago reported figure. Total revenues of $3.87 billion surpassed the consensus estimate by 2.2% and increased 3.5% from the year-ago reported figure. Revenues increased 2.6% on a constant-currency basis.
Quarter Details
Revenues from the Technology and Analytics segment were $1.53 billion, up 2.1% from the fourth-quarter 2022 reported figure and beating our estimated $1.5 billion. The segment’s revenues grew 1.3% on a constant-currency basis.
The Research and Development segment’s revenues were $2.15 billion, up 2.1% from the year-ago reported figure and 3.7% on a constant currency basis. The figure beat our estimate by 3.7%. Contract Sales & Medical Solutions revenues grew 2.2% on a year-over-year basis to $186 million and rose 1.7% on a constant-currency basis. The figure surpassed our estimate by 6.9%.
Adjusted EBITDA for the fourth quarter is pegged at $966 million, indicating 5% growth from the year-ago figure but missing our estimated $959.6 million.
The company exited the quarter with cash and cash equivalents of $1.38 billion compared with $1.22 billion held at the end of the previous quarter. Long-term debt was $13.67 billion compared with $12.32 billion held at the end of the previous quarter.
Net cash generated from operating activities was $747 million and capital expenditure for the quarter was $179 million. The free cash flow generated during the quarter was $568 million. The company repurchased shares of $229 million in the fourth quarter.
2024 Guidance
Revenues are anticipated to range from $15.4 billion to $15.65 billion. Adjusted EBITDA is projected to fall between $3.7 billion and $3.8 billion. The company forecasts adjusted EPS to range from $10.95 to $11.25.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, IQVIA has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward 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 belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Edwards Lifesciences (EW), has gained 8.5% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Edwards Lifesciences reported revenues of $1.53 billion in the last reported quarter, representing a year-over-year change of +13.8%. EPS of $0.64 for the same period compares with $0.64 a year ago.
For the current quarter, Edwards Lifesciences is expected to post earnings of $0.64 per share, indicating a change of +3.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.
Edwards Lifesciences has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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IQVIA Holdings Inc. (IQV) : Free Stock Analysis Report
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