IQVIA may be overvalued with strong growth indicators, but the 20 analysts following the company give it an average rating of buy. The analysts have set target prices ranging from $220.0 to $285.0 per share, for an average of $250.26. At today's price of $187.49, IQVIA is trading -25.08% away from its average target price, suggesting there is an analyst consensus of strong upside potential.
IQVIA Holdings Inc. engages in the provision of advanced analytics, technology solutions, and clinical research services to the life sciences industry in the Americas, Europe, Africa, and the Asia-Pacific. Based in Durham, NC, the large-cap Health Care company has 86,000 full time employees. IQVIA has not offered a dividend during the last year.
IQVIA has a trailing twelve month P/E ratio of 33.1, compared to an average of 24.45 for the Health Care sector. Based on its EPS guidance of 12.02, the company has a forward P/E ratio of 15.6. Based on the 65.8% compound average growth rate of IQVIA's historical and projected earnings per share, the company's PEG ratio is 0.54. This EPS growth rate is likely not sustainable, so will substitute the broader market's 5-year projected EPS growth rate of 11.5%, which gives us a PEG ratio of 3.11. This suggests that these shares are overvalued.
Furthermore, IQVIA is likely overvalued compared to its book value, since its P/B ratio of 6.0 is higher than the sector average of 4.16. The company's shares are currently trading 293.5% above their Graham number, implying that they are overvalued in terms of earnings and book value.
If analysts are giving the the company a decent rating despite its hefty price point, it could be related to its strong cash flows. They might also believe that IQVIA's positive margin growth trend will continue.
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $11,088 | $11,359 | $13,874 | $14,410 |
| Revenue Growth | n/a | 2.44% | 22.14% | 3.86% |
| Gross Margins | 34.2% | 34.0% | 33.4% | 34.9% |
| Gross Margins Growth | n/a | -0.58% | -1.76% | 4.49% |
| Operating Margins | 7.7% | 6.9% | 10.2% | 12.7% |
| Operating Margins Growth | n/a | -10.39% | 47.83% | 24.51% |
| Net Margins | 1.72% | 2.46% | 6.96% | 7.57% |
| Net Margins Growth | n/a | 43.02% | 182.93% | 8.76% |
| Earnings Per Share | $0.96 | $1.43 | $4.95 | $5.66 |
| EPS Growth | n/a | 48.96% | 246.15% | 14.34% |
| Diluted Shares (MM) | 200 | 195 | 195 | 186 |
| Free Cash Flow (MM) | $835 | $1,343 | $2,302 | $1,586 |
| FCF Growth | n/a | 60.84% | 71.41% | -31.1% |
| Capital Expenditures (MM) | -$582 | -$616 | -$640 | -$674 |
| Net Debt / EBITDA | 5.55 | 5.23 | 3.9 | 4.0 |
