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Medpace Holdings, Inc. (MEDP) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Medpace (MEDP - Free Report) ? Shares have been on the move with the stock up 41.6% over the past month. The stock hit a new 52-week high of $235.72 in the previous session. Medpace has gained 1.8% since the start of the year compared to the -18.7% move for the Zacks Medical sector and the -29.2% return for the Zacks Medical Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 24, 2022, Medpace reported EPS of $2.05 versus consensus estimate of $1.47 while it beat the consensus revenue estimate by 8.08%.
Valuation Metrics
Medpace may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Medpace has a Value Score of D. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 35.5X current fiscal year EPS estimates, which is a premium to the peer industry average of 18.2X. On a trailing cash flow basis, the stock currently trades at 39.4X versus its peer group's average of 12X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Medpace currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Medpace fits the bill. Thus, it seems as though Medpace shares could still be poised for more gains ahead.
How Does MEDP Stack Up to the Competition?
Shares of MEDP have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is GoodRx Holdings, Inc. (GDRX - Free Report) . GDRX has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. GoodRx Holdings, Inc. beat our consensus estimate by 50%, and for the current fiscal year, GDRX is expected to post earnings of $0.26 per share on revenue of $782.28 million.
Shares of GoodRx Holdings, Inc. have gained 2.4% over the past month, and currently trade at a forward P/E of 19.82X and a P/CF of 44.68X.
The Medical Services industry is in the top 29% of all the industries we have in our universe, so it looks like there are some nice tailwinds for MEDP and GDRX, even beyond their own solid fundamental situation.
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Medpace Holdings, Inc. (MEDP) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Medpace (MEDP - Free Report) ? Shares have been on the move with the stock up 41.6% over the past month. The stock hit a new 52-week high of $235.72 in the previous session. Medpace has gained 1.8% since the start of the year compared to the -18.7% move for the Zacks Medical sector and the -29.2% return for the Zacks Medical Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 24, 2022, Medpace reported EPS of $2.05 versus consensus estimate of $1.47 while it beat the consensus revenue estimate by 8.08%.
Valuation Metrics
Medpace may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Medpace has a Value Score of D. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 35.5X current fiscal year EPS estimates, which is a premium to the peer industry average of 18.2X. On a trailing cash flow basis, the stock currently trades at 39.4X versus its peer group's average of 12X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Medpace currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Medpace fits the bill. Thus, it seems as though Medpace shares could still be poised for more gains ahead.
How Does MEDP Stack Up to the Competition?
Shares of MEDP have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is GoodRx Holdings, Inc. (GDRX - Free Report) . GDRX has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. GoodRx Holdings, Inc. beat our consensus estimate by 50%, and for the current fiscal year, GDRX is expected to post earnings of $0.26 per share on revenue of $782.28 million.
Shares of GoodRx Holdings, Inc. have gained 2.4% over the past month, and currently trade at a forward P/E of 19.82X and a P/CF of 44.68X.
The Medical Services industry is in the top 29% of all the industries we have in our universe, so it looks like there are some nice tailwinds for MEDP and GDRX, even beyond their own solid fundamental situation.