PRA Health Sciences, Inc. ( PRAH Quick Quote PRAH - Free Report) declines 2.8% on Feb 24, despite reporting strong earnings.
The company reported fourth-quarter 2020 adjusted EPS of $1.55, beating the Zacks Consensus Estimate by 5.4%. The bottom line, also, rose from the prior-year quarter’s tally by 0.6%.
For 2020, adjusted EPS came in at $4.75, falling 8.1% year over year.
For the quarter, revenues came in at $873.5 million, beating the Zacks Consensus Estimate by 5.4%. The topline grew 9.1% year over year.
For 2020, the company recorded revenues of $3.18 billion in the quarter under review, up 3.8% year over year and 3.7% at cc.
Results in Detail Segmental Analysis
Net new business at the Clinical Research segment came in at $872.4 million. Through the segment, the company receives contracts to provide clinical research services, with payments based on fixed-fee or fee-for-service arrangements.
Revenues at the Clinical Research segment amounted to $797.5 million, up 10% year over year, while revenues at the Data Solutions segment amounted to $75.9 million, up 1.1% year over year.
Direct costs totaled $437.7 million in the quarter, up 13.4% from the prior-year quarter. Per management, the increase was primarily driven by a rise in labor-related costs in the Clinical Research segment and higher data costs in the Data Solutions segment.
Gross profit came in at $435.7 million, up 5.2%. Gross margin came in at 49.9%, highlighting a contraction of 187 basis points (bps).
Adjusted operating profit in the quarter grossed $315 million, up 1.4% from the year-ago quarter. Adjusted operating margin in the quarter was 36.1%, down 275 bps.
The company exited the fourth quarter of 2020 with cash and cash equivalents of $506.3 million, up from $236.2 million at the end of the year-ago period.
Cumulative net cash provided by operating activities totaled $427.2 million compared with $253.6 million in the year-ago period.
PRA Health ended the fourth quarter on a strong note. Solid performance by both Clinical Research and Data Solutions segments is a major positive. PRA Health continues to gain from large pharmaceutical companies and is also well-poised on CRO market prospects.
On the flip side, direct costs shot up in the quarter under review. Contraction in both margins is a concern as well.
Zacks Rank and Key Picks
PRA Health currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space that already announced quarterly results are
Hologic, Inc. ( HOLX Quick Quote HOLX - Free Report) , Abbott Laboratories ( ABT Quick Quote ABT - Free Report) and AngioDynamics, Inc. ( ANGO Quick Quote ANGO - Free Report) , each presently carrying a Zacks Rank#2 (Buy). You can see the complete list of today’s Zacks #1Rank (Strong Buy) stocks here .
Hologic reported first-quarter fiscal 2021 adjusted EPS of $2.86, which surpassed the Zacks Consensus Estimate by 33.6%.
Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which surpassed the Zacks Consensus Estimate by 6.6%. Further, fourth-quarter worldwide sales of $10.7 billion outpaced the consensus mark by 7.9%.
AngioDynamics reported second-quarter fiscal 2021 adjusted EPS of a penny. The Zacks Consensus Estimate was pegged at a loss of two centsper share. Additionally, revenues of $72.8 million beat the consensus mark by 8%.
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