It has been about a month since the last earnings report for IQVIA Holdings (IQV - Free Report) . Shares were flat in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent trend continue leading up to its next earnings release, or is IQVIA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
IQVIA Surpasses Earnings and Revenue Estimates in Q1
IQVIA Holdings reported solid first-quarter 2019 results wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings of $1.53 per share beat the consensus mark by 2 cents and increased 14.2% on a year-over-year basis. Total revenues of $2.68 billion outpaced the consensus estimate by $22 million and increased 4.7% year over year on a reported basis and 7.2% on a constant-currency basis.
Revenues from Technology & Analytics Solutions (TAS) totaled $1.08 billion, up 9.1% on a reported basis and 12.9% on a constant-currency basis. The segment accounted for 40% of total revenues.
Research & Development Solutions (R&DS) revenues of $1.42 billion increased 3.7% on a reported basis and 5.3% on a constant-currency basis. The segment contributed 53% to total revenues.
Revenues from Contract Sales & Medical Solutions (CSMS) totaled $193 million, down 9.4% on a reported basis and 7% on a constant-currency basis. The segment accounted for 7% of total revenues.
Adjusted EBITDA came in at $587 million, up 7.3% year over year. Adjusted EBITDA margin increased to 21.9% from 21.3% in the year-ago quarter.
Balance Sheet and Cash Flow
IQVIA Holdings exited first-quarter 2019 with cash and cash equivalents balance of $936 million compared with $891 million at the end of the prior quarter. Long-term debt at the end of the quarter was $11.2 billion compared with $10.9 billion at the end of the fourth quarter.
The company generated $113 million of cash from operating activities in the reported quarter and spent $141 million on capex.
IQVIA Holdings repurchased $141 million of its shares from certain of its remaining private equity sponsors during the quarter.
For second-quarter 2019, IQVIA projects adjusted earnings in the range of $1.46-$1.51 per share. Revenues are expected between $2,660 million and $2,710 million. Adjusted EBITDA is anticipated in the range of $575-$590 million.
For the full year, the company projects adjusted earnings between $6.20 per share and $6.40 per share. Revenues are expected to be between $10,900 million and $11,125 million. Adjusted EBITDA is anticipated in the range of $2,375-$2,425 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
Currently, IQVIA has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, IQVIA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.