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Today we're going to take a look at the well-established IQVIA Holdings Inc. (NYSE:IQV). The company's stock received a lot of attention from a substantial price increase on the NYSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on IQVIA Holdings’s outlook and valuation to see if the opportunity still exists.
Is IQVIA Holdings still cheap?
The stock is currently trading at US$191 on the share market, which means it is overvalued by 32% compared to my intrinsic value of $145.04. This means that the opportunity to buy IQVIA Holdings at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that IQVIA Holdings’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will IQVIA Holdings generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to more than double over the next couple of years, the future seems bright for IQVIA Holdings. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in IQV’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe IQV should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on IQV for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for IQV, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
If you want to dive deeper into IQVIA Holdings, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 1 warning sign for IQVIA Holdings you should know about.
If you are no longer interested in IQVIA Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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