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Syneos Health (SYNH) to Go Private, Reports Q2 Performance
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Syneos Health recently announced that its stockholders have approved the company’s merger agreement with a private investment consortium at a special meeting held on Aug 2, 2023. The consortium affiliates include Elliott Investment Management L.P., Patient Square Capital and Veritas Capital.
As announced on SYNH’s May 10 release, the all-cash transaction represents a 24% premium to the company’s unaffected closing stock price on Feb 13, 2023, which is the last trading day before media speculation regarding the company.
The transaction is expected to be completed in the second half of 2023, subject to the satisfaction of customary closing conditions and regulatory approvals.
More on the News
Upon the closing of the agreement, Syneos Health’s Class A common stock shares will no longer trade on the Nasdaq Stock Market LLC and will be deregistered under the Securities Exchange Act of 1934 as amended. Henceforth, the company will operate as a private company.
Image Source: Zacks Investment Research
Per SYNH, the definitive agreement reflects the comprehensive review of available opportunities, including interests from multiple parties, backed by the assistance of independent financial and legal advisors. The partnership with the consortium will enable the company to accelerate its growth strategy, enhance customer delivery and evolve the organization toward a tech-enabled future.
Q2 2023 Earnings Performance
Parallel to the merger news, Syneos Health declared second-quarter 2023 financial results within the latest quarterly SEC filing. The company reported GAAP diluted earnings per share (EPS) of 1 cent compared with 75 cents in the prior-year quarter. Revenues in the second quarter increased 0.4% year over year to $1.37 billion and also exceeded the Zacks Consensus Estimate by 9.6%.
Segment-wise, the Clinical Solutions segment recorded revenues of $1.02 billion in the second quarter, down 0.4% year over year on a reported basis. This exceeded our model’s projected revenues of $940 million in this segment.
Commercial Solutions revenues were $344.3 million in the reported quarter, up 2.8% year over year. This compares with our model’s segmental projection of $263.3 million.
In the quarter under review, the gross margin contracted 237 basis points (bps) to 21.6%, with a 3.5% increase in the cost of revenues. The adjusted operating margin (excluding depreciation, amortization and restructuring and other expenses) contracted 552 bps from the year-ago quarter to 8.2%.
SYNH reported cash, cash equivalents and restricted cash of $82.3 million at the second quarter-end. Per the update given on 10-Q, the company has incurred approximately $23 million in costs in connection with the Merger and expects to continue to incur significant costs and expenses, including fees for professional services and other transaction costs.
Price Performance
In the past six months, SYNH shares have increased 23.1% against the industry’s fall of 9.3%.
Zacks Rank and Other Key Picks
Syneos Health currently carries a Zacks Rank #2 (Buy).
Haemonetics’stock has risen 23.7% in the past year. Earnings estimates for Haemoneticshave increased from $3.56 to $3.58 in 2023 and $3.96 to $3.98 in 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 19.32%. In the last reported quarter, it posted an earnings surprise of 38.16%.
Estimates for DexCom’s 2023 EPS have increased from $1.07 to $1.19 in the past 30 days. Shares of the company have increased 26% in the past year against the industry’s fall of 3.7%.
DXCM’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 28.83%. In the last reported quarter, it posted an earnings surprise of 54.55%.
Estimates for SiBone’s2023 loss have narrowed from $1.42 to $1.40 per share in the past 30 days and to $1.27 in the past seven days. Shares of the company have increased 23.3% in the past year against the industry’s fall of 4.1%.
SIBN’s earnings beat estimates in all of the trailing four quarters, the average surprise being 20.37%. In the last reported quarter, SiBonedelivered an earnings surprise of 26.83%.
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Syneos Health (SYNH) to Go Private, Reports Q2 Performance
Syneos Health recently announced that its stockholders have approved the company’s merger agreement with a private investment consortium at a special meeting held on Aug 2, 2023. The consortium affiliates include Elliott Investment Management L.P., Patient Square Capital and Veritas Capital.
As announced on SYNH’s May 10 release, the all-cash transaction represents a 24% premium to the company’s unaffected closing stock price on Feb 13, 2023, which is the last trading day before media speculation regarding the company.
The transaction is expected to be completed in the second half of 2023, subject to the satisfaction of customary closing conditions and regulatory approvals.
More on the News
Upon the closing of the agreement, Syneos Health’s Class A common stock shares will no longer trade on the Nasdaq Stock Market LLC and will be deregistered under the Securities Exchange Act of 1934 as amended. Henceforth, the company will operate as a private company.
Image Source: Zacks Investment Research
Per SYNH, the definitive agreement reflects the comprehensive review of available opportunities, including interests from multiple parties, backed by the assistance of independent financial and legal advisors. The partnership with the consortium will enable the company to accelerate its growth strategy, enhance customer delivery and evolve the organization toward a tech-enabled future.
Q2 2023 Earnings Performance
Parallel to the merger news, Syneos Health declared second-quarter 2023 financial results within the latest quarterly SEC filing. The company reported GAAP diluted earnings per share (EPS) of 1 cent compared with 75 cents in the prior-year quarter. Revenues in the second quarter increased 0.4% year over year to $1.37 billion and also exceeded the Zacks Consensus Estimate by 9.6%.
Segment-wise, the Clinical Solutions segment recorded revenues of $1.02 billion in the second quarter, down 0.4% year over year on a reported basis. This exceeded our model’s projected revenues of $940 million in this segment.
Commercial Solutions revenues were $344.3 million in the reported quarter, up 2.8% year over year. This compares with our model’s segmental projection of $263.3 million.
In the quarter under review, the gross margin contracted 237 basis points (bps) to 21.6%, with a 3.5% increase in the cost of revenues. The adjusted operating margin (excluding depreciation, amortization and restructuring and other expenses) contracted 552 bps from the year-ago quarter to 8.2%.
SYNH reported cash, cash equivalents and restricted cash of $82.3 million at the second quarter-end. Per the update given on 10-Q, the company has incurred approximately $23 million in costs in connection with the Merger and expects to continue to incur significant costs and expenses, including fees for professional services and other transaction costs.
Price Performance
In the past six months, SYNH shares have increased 23.1% against the industry’s fall of 9.3%.
Zacks Rank and Other Key Picks
Syneos Health currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader medical space are Haemonetics (HAE - Free Report) , DexCom (DXCM - Free Report) and SiBone (SIBN - Free Report) . Haemonetics sports a Zacks Rank #1 (Strong Buy), while DexCom and SiBone each carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Haemonetics’stock has risen 23.7% in the past year. Earnings estimates for Haemoneticshave increased from $3.56 to $3.58 in 2023 and $3.96 to $3.98 in 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 19.32%. In the last reported quarter, it posted an earnings surprise of 38.16%.
Estimates for DexCom’s 2023 EPS have increased from $1.07 to $1.19 in the past 30 days. Shares of the company have increased 26% in the past year against the industry’s fall of 3.7%.
DXCM’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 28.83%. In the last reported quarter, it posted an earnings surprise of 54.55%.
Estimates for SiBone’s2023 loss have narrowed from $1.42 to $1.40 per share in the past 30 days and to $1.27 in the past seven days. Shares of the company have increased 23.3% in the past year against the industry’s fall of 4.1%.
SIBN’s earnings beat estimates in all of the trailing four quarters, the average surprise being 20.37%. In the last reported quarter, SiBonedelivered an earnings surprise of 26.83%.