Zinger Key Points
- Medpace shares fell after reporting Q3 revenue of $533.3M, missing the $540.99M consensus, despite an 8.3% Y/Y growth.
- Medpace cuts FY24 revenue forecast to $2.090B-$2.130B, below the consensus of $2.138B.
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Medpace Holdings, Inc. MEDP shares are trading lower on Tuesday after reporting its third-quarter financial results yesterday.
Revenue rose 8.3% year-over-year to $533.3 million, missing the consensus of $540.99 million.
On a constant currency basis, revenue increased by 8.1% in the quarter. As of September 30, backlog rose by 8.8% to $2.927 billion.
Net new business awards totaled $533.7 million for the third quarter of 2024, resulting in a net book-to-bill ratio of 1.00x, compared to $611.5 million in the prior year.
EBITDA rose 31.7% to $118.8 million, with a margin of 22.3% versus 18.3% a year ago.
As of September-end, the company held $656.9 million in cash and cash equivalents and generated $149.1 million in operating cash flow in the third quarter.
The company didn’t repurchase any shares during the quarter, leaving $308.8 million available under the authorized share repurchase program.
Outlook: Medspace lowered its FY24 revenue forecast from $2.125 billion – $2.175 billion to $2.090 billion – $2.130 billion versus the consensus of $2.138 billion.
The company expects EPS of $11.71 – $12.09 (prior view $11.24 – $11.93) compared to the estimate of $11.56.
William Blair analyst Max Smock stated that they suspect that elevated cancellations may have contributed to the weak net bookings, which is preferable to a significant drop in gross bookings due to a lower win rate.
The analyst says that given the rebound in biotech funding observed this year, particularly in September, investors may be able to buy the dip if gross bookings remain stable and management provides clarity on cancellations.
However, the analyst adds that without further insight into the third-quarter bookings miss, it’s uncertain whether this pullback presents a compelling buying opportunity or indicates ongoing challenges. The analyst reiterated the Outperform rating.
Investors can gain exposure to the stock via Franklin Genomic Advancements ETF HELX and Argent Mid Cap ETF AMID.
Price Action: MEDP shares are down 8.76% at $322.00 at the last check Tuesday.
Photo via Shutterstock
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