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Why Is IQVIA (IQV) Up 5.4% Since Last Earnings Report?

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It has been about a month since the last earnings report for IQVIA Holdings (IQV). Shares have added about 5.4% 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 its most recent earnings report in order to get a better handle on the important catalysts.

IQVIA Surpasses Q2 Earnings & Revenues Estimates

IQVIA Holdings reported solid second-quarter 2021 results wherein the company’s earnings as well as revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings per share of $2.13 beat the consensus mark by 2.9% and improved 80.5% on a year-over-year basis. Total revenues of $3.44 billion outpaced the consensus estimate by 5.5% and increased 36.4% year over year on a reported basis and 33.2% on constant-currency basis.

Segmental Revenues

Revenues from Technology & Analytics Solutions totaled $1.35 billion, up 22% on a reported basis and 17.9% on constant-currency basis.

Research & Development Solutions’ revenues of $1.89 billion increased 53.1% on a reported basis and 50.7% on constant-currency basis.

Revenues from Contract Sales & Medical Solutions totaled $194 million, up 9.6% on a reported basis and 7.3% on a constant-currency basis.

Operating Performance

Adjusted EBITDA was $722 million, up 49.5% year over year.

Balance Sheet and Cash Flow

IQVIA exited second-quarter 2021 with cash and cash equivalents balance of $1.81 billion compared with $2.31 billion at the end of the prior quarter. Long-term debt of $12.1 billion was flat sequentially.

The company generated $539 million of cash from operating activities in the reported quarter and CapEx was $145 million. Free cash flow was $394 million.

During the reported quarter, IQVIA repurchased shares worth $45 million. As of Jun 30, 2021, the company had nearly $822 million of share-buyback authorization remaining.

Third-Quarter 2021 Guidance

IQVIA expects third-quarter revenues in the range of $3.29-$3.365 billion. Adjusted earnings per share are expected between $2.06 and $2.13. Adjusted EBITDA is anticipated between $710 million and $730 million.

2021 Guidance

For the full year, IQVIA now expects revenues in the band of $13.55-$13.7 billion compared with the prior projection of $13.2-$13.5 billion. Adjusted earnings per share are expected between $8.70 and $8.90 compared with the prior forecast of $8.50-$8.75. Adjusted EBITDA is anticipated between $2.950 billion and $3 billion compared with the prior prediction of $2.900-$2.965 billion.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 5.21% due to these changes.

VGM Scores

At this time, IQVIA has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, 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 B. 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 looks promising. Notably, IQVIA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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