IQVIA Up 3.4% 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 3.4% 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 drivers.

IQVIA Surpasses Q2 Earnings Estimates

IQVIA Holdings Analytics Inc. has reported impressive second-quarter 2024 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings (excluding 67 cents from non-recurring items) were $2.6 per share, outpacing the Zacks Consensus Estimate by 2.3% and increasing 2.4% on a year-over-year basis. Total revenues of $3.8 billion surpassed the consensus estimate marginally and rose 2.3% from the year-ago quarter.

Quarter Details

Revenues from the Technology and Analytics segment were $1.5 billion, increasing 2.7% from second-quarter 2023. The metric met our estimate and increased 3.8% on a constant-currency basis.

The Research and Development segment's revenues were $2.2 billion, increasing 2.4% from the year-ago quarter and 3.3% on a constant-currency basis. The figure surpassed our estimate of $2.1 billion.

Contract Sales & Medical Solutions revenues declined 2.3% on a year-over-year basis to $172 million and increased 2.8% on a constant-currency basis. It missed our estimate of $177 million.

Adjusted EBITDA for the second quarter of 2024 was $887 million, indicating 12.7% growth from the year-ago quarter and outpacing our expectation of $874.6 million.

The company exited the quarter with cash and cash equivalents of $1.5 billion compared with $1.4 billion at the end of the preceding quarter. Long-term debt (less current portion) was $12.1 billion compared with $12.8 billion at the end of the first quarter of 2024.

Net cash generated from operating activities was $588 million and the capital expenditure for the quarter was $143 million. The company generated a free cash flow of $445 million in the quarter.

2024 Guidance

For 2024, IQV updated its revenue guidance to $15.43-$15.53 billion compared with $15.33-$15.58 billion mentioned previously.

The company raised the adjusted EPS guidance to $11.10-$11.30 compared with $10.95-$11.25 mentioned previously. The updated guided range for adjusted EBITDA for the same period is anticipated to be $3.71-$3.77 compared with $3.70-$3.80 billion mentioned previously.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

Currently, IQVIA has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% 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 has been net zero. 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, Intuitive Surgical, Inc. ISRG, has gained 6.2% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.

Intuitive Surgical reported revenues of $2.01 billion in the last reported quarter, representing a year-over-year change of +14.5%. EPS of $1.78 for the same period compares with $1.42 a year ago.

For the current quarter, Intuitive Surgical is expected to post earnings of $1.65 per share, indicating a change of +13% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

Intuitive Surgical has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.

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