PAREXEL International Corp is coming off of a record-setting year and raised its outlook. Estimates are on the rise and have shares at attractive valuations.
PAREXEL International is a pharmaceutical services company, providing research, consulting, and medical communications services.
A Record-Setting Year
On Aug 9 PAREXEL reported its fourth-quarter results for fiscal 2011 that showed a 5.2% increase in revenue, to $311 million. Annual revenues hit a company record of $1.2 billion. On the year the backlog swelled 29%, to $3.4 billion.
Earnings per share came in at $0.10, 4 cents higher than the Zacks Consensus Estimate. The company has beaten estimates in 7 of the last 8 quarters.
PAREXEL raised its outlook for the coming year as well. Analysts followed suit and those upward estimate revisions gave PRXL a Zacks #1 Rank (Strong Buy).
The Zacks Consensus Estimate for this fiscal year is up 6 cents, to $1.11 in the past 2 months. Next years estimates are averaging $1.57. That puts projected earnings growth at 17% and 42%, respectively.
Shares of PRXL are going for roughly 18 times forward estimates, which puts the PEG ratio at 1.1. The price to sales is at 0.8 times and the stock is going for 2.2 times book value.
PRXL has been in a fairly wide trading range lately, but with the outlook improving the stock could break out any day. When an appetite for risk returns to the market, investors may flock to PAREXEL.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service