Results: IQVIA Holdings Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
Investors in IQVIA Holdings Inc. (NYSE:IQV) had a good week, as its shares rose 9.3% to close at US$239 following the release of its annual results. It looks like a credible result overall - although revenues of US$15b were in line with what the analysts predicted, IQVIA Holdings surprised by delivering a statutory profit of US$7.29 per share, a notable 12% above expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for IQVIA Holdings
After the latest results, the 18 analysts covering IQVIA Holdings are now predicting revenues of US$15.6b in 2024. If met, this would reflect a satisfactory 3.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to shrink 3.1% to US$7.25 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$15.6b and earnings per share (EPS) of US$7.37 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The consensus price target rose 8.5% to US$267despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of IQVIA Holdings' earnings by assigning a price premium. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on IQVIA Holdings, with the most bullish analyst valuing it at US$300 and the most bearish at US$239 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting IQVIA Holdings is an easy business to forecast or the the analysts are all using similar assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the IQVIA Holdings' past performance and to peers in the same industry. We would highlight that IQVIA Holdings' revenue growth is expected to slow, with the forecast 3.9% annualised growth rate until the end of 2024 being well below the historical 8.4% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.1% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than IQVIA Holdings.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that IQVIA Holdings' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for IQVIA Holdings going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for IQVIA Holdings that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
