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Syneos Health (SYNH) Hits a 52-Week High: What's Driving It?

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On Dec 27, shares of Syneos Health (SYNH - Free Report) scaled a new 52-week high of $59.03 and closed the session at the same tally. In fact, the stock has increased nearly 17.7% since its third-quarter 2019 earnings announcement on Oct 31.

Strong year-over-year revenue growth across operating segments, solid expansion of the Syneos One product and raised adjusted EPS guidance for 2019 are some of the key drivers.

Let us discuss the factors that are driving growth.

Robust Q3 Earnings

The company exited the third quarter on a promising note. The Clinical Solutions segment registered a 5.9% rise on a year-over-year basis. The upside can be attributed to net new business growth and favorable revenue mix. Also, the Commercial Solutions segment witnessed a 4.7% uptick year over year. This was driven by net new business growth and the higher rise in reimbursable expenses during the quarter.

 

Gross margin expanded 61 basis points (bps) to 22.4%.

The lifted adjusted EPS outlook for 2019 buoys optimism among investors, indicating the continuation of this bullish trend through the rest of the year.

Other Encouraging Factors

In November 2019, Syneos Health inked a partnership with AI and advanced data analytics company AiCure for driving swifter and more efficient trials to optimize patient engagement. Investors have been optimistic about the company’s growth prospects since this crucial development.

Meanwhile, Syneos Health has been having a great run on the bourses in the past year. The stock has surged 50% compared with the broader industry’s growth of 29%. The company currently has a market cap of $6.13 billion.

Zacks Rank & Stocks Worth a Look

Syneos Health currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Haemonetics Corporation (HAE - Free Report) , NuVasive, Inc (NUVA - Free Report) and Omnicell (OMCL - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy)  stocks here.

Haemonetics has a projected long-term earnings growth rate of 13.5%.

NuVasive has an expected long-term earnings growth rate of 10.9%.

Omnicell has a long-term earnings growth rate of 12.5%.

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