Now trading at a price of $218.42, IQVIA has moved 1.8% so far today.
Over the last year, IQVIA logged a 0.3% change, with its stock price reaching a high of $249.11 and a low of $165.75. Over the same period, the stock underperformed the S&P 500 index by -14.0%. As of April 2023, the company's 50-day average price was $199.91. 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 87,000 full time employees. IQVIA has not offered a dividend during the last year.
Growing Revenues With Increasing Reinvestment in the Business:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $11,088 | $11,359 | $13,874 | $14,410 |
| Gross Margins | 34.2% | 34.0% | 33.4% | 34.9% |
| Operating Margins | 7.7% | 6.9% | 10.2% | 12.7% |
| Net Margins | 1.72% | 2.46% | 6.96% | 7.57% |
| Net Income (MM) | $191 | $279 | $966 | $1,091 |
| Net Interest Expense (MM) | -438 | -410 | -369 | -403 |
| Net Interest Expense (MM) | -$438 | -$410 | -$369 | -$403 |
| Depreciation & Amort. (MM) | -$1,202 | -$1,287 | -$1,264 | -$1,130 |
| Earnings Per Share | $0.96 | $1.43 | $4.95 | $5.58 |
| EPS Growth | n/a | 48.96% | 246.15% | 12.73% |
| Diluted Shares (MM) | 200 | 195 | 195 | 186 |
| Free Cash Flow (MM) | $835 | $1,343 | $2,302 | $1,586 |
| Capital Expenditures (MM) | -$582 | -$616 | -$640 | -$674 |
| Net Current Assets (MM) | -$12,862 | -$13,194 | -$13,884 | -$14,591 |
| Current Ratio | 1.05 | 1.12 | 0.91 | 0.89 |
| Long Term Debt (MM) | $11,545 | $12,384 | $12,034 | $12,595 |
| Net Debt / EBITDA | 5.55 | 5.23 | 3.9 | 4.0 |
IQVIA has growing revenues and increasing reinvestment in the business, exceptional EPS growth, and consistent free cash flow. However, the firm suffers from slimmer gross margins than its peers and a highly leveraged balance sheet. Finally, we note that IQVIA has weak operating margings with a positive growth rate.
The Market May Be Overvaluing IQVIA's Earnings and Assets:
IQVIA has a trailing twelve month P/E ratio of 35.8, compared to an average of 24.45 for the Health Care sector. Based on its EPS guidance of $11.94, the company has a forward P/E ratio of 16.7. According to the 65.6% compound average growth rate of IQVIA's historical and projected earnings per share, the company's PEG ratio is 0.55. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 11.5%. On this basis, the company's PEG ratio is 3.13. This suggests that these shares are overvalued. Furthermore, IQVIA is likely overvalued compared to the book value of its equity, since its P/B ratio of 6.83 is higher than the sector average of 4.16. The company's shares are currently trading 353.1% above their Graham number.
There's an Analyst Consensus of Some Upside Potential for IQVIA:
The 20 analysts following IQVIA have set target prices ranging from $200.0 to $285.0 per share, for an average of $244.89 with a buy rating. As of April 2023, the company is trading -18.4% away from its average target price, indicating that there is an analyst consensus of some upside potential.
IQVIA has a very low short interest because 1.4% of the company's shares are sold short. Institutions own 90.1% of the company's shares, and the insider ownership rate stands at 0.88%, suggesting a small amount of insider investors. The largest shareholder is the Vanguard Group, Inc., whose 12% stake in the company is worth $4,722,387,357.
