Why Is IQVIA (IQV) Up 12.4% Since Last Earnings Report?
It has been about a month since the last earnings report for IQVIA Holdings (IQV). Shares have added about 12.4% 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 catalysts.
IQVIA Surpasses Q3 Earnings Estimates
IQVIA Holdings reported mixed third-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate, while revenues missed the mark.
Adjusted earnings (excluding 86 cents from non-recurring items) were $2.49 per share, beating the Zacks Consensus Estimate by 0.4% and increasing 1.2% from the year-ago reported figure.
Total revenues of $3.74 billion missed the consensus estimate by 1.2% but increased 4.9% from the year-ago figure. Revenues increased 4.1% on a constant-currency basis.
Quarter Details
Revenues from the Technology and Analytics segment were $1.43 billion, up 2.2% from the third-quarter 2022 reported figure but missing our estimated $1.49 billion. The segment’s revenues grew 0.9% on a constant-currency basis.
The Research and Development segment’s revenues were $2.12 billion, up 7.2% from the year-ago reported figure. The figure beat our estimate by 2%. Contract Sales & Medical Solutions revenues were flat on a year-over-year basis at $183 million and rose 4.9% on a constant-currency basis. The figure, however, lagged our estimated $186.3 million.
Adjusted EBITDA for the third quarter is pegged at $888 million, indicating 9.1% growth from the year-ago figure but missing our estimated $889.2 million.
The company exited the quarter with cash and cash equivalents of $1.22 billion compared with $1.38 billion held at the end of the previous quarter. Long-term debt was $12.32 billion compared with $11.83 billion held at the end of the previous quarter.
Net cash generated from operating activities was $583 million and capital expenditure for the quarter was $146 million. Free cash flow generated during the quarter was $437 million. The company repurchased shares of $144 million in the third quarter and returned $49.2 million as dividends to shareholders.
4Q23 Guidance
Revenues are expected to be in the range of $3.77-$3.8 billion. Adjusted EBITDA is expected to be in the range of $957 million to $967 million. Adjusted earnings per share (EPS) are expected to be in the range of $2.79 to $2.86.
2023 Guidance
Revenues are expected to be in the range of $14.89-$14.92 billion, representing a constant currency growth of 9%.
Adjusted EBITDA is expected to be in the range of $3.56 billion to $3.57 billion. Adjusted EPS is expected to be in the range of $10.16 to $10.23.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, IQVIA has an average Growth Score of C, though it is lagging a lot 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 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 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 belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Pacific Biosciences of California (PACB), has gained 30.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Pacific Biosciences reported revenues of $55.69 million in the last reported quarter, representing a year-over-year change of +72.4%. EPS of -$0.27 for the same period compares with -$0.32 a year ago.
Pacific Biosciences is expected to post a loss of $0.31 per share for the current quarter, representing a year-over-year change of +11.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.5%.
Pacific Biosciences has a Zacks Rank #3 (Hold) 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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