IQVIA Holdings Inc. (IQV – Free Report) is benefiting from its ability to standardize, organize and integrate data through analytics and global technology, which boosts its client base. Shareholder-friendly policy is another green flag for investors. Meanwhile, competitive pressure is troublesome and low liquidity poses a threat to the company’s ability to pay off short-term debt.
IQV reported impressive third-quarter 2024 results. Adjusted earnings were $2.8 per share, outpacing the Zacks Consensus Estimate by 1.1% and rising 14.1% on a year-over-year basis. Total revenues of $3.9 billion surpassed the consensus estimate by 1.1% and grew 4.3% from the year-ago quarter.
How is IQVIA Doing?
IQV’s addressable market size exceeds $330 billion, and consists of outsourced research and development, real-world evidence and connected health, and technology-enabled clinical and commercial operations markets.
The company’s goal is to expand and penetrate these markets using innovative means and enhance its offerings using its information, advanced analytics, transformative technology and expertise in specific domains.
The company’s differentiating asset is its enormous treasure trove of data. It has a huge healthcare information collection encompassing more than one billion comprehensive, longitudinal, non-identified patient records across sales, prescription and promotional data, electronic medical records, medical claims, genomics, and social media.
IQVIA’s rapidly increasing information set has nearly 61 petabytes of proprietary data sourced from around 150,000 data suppliers and covers more than one million data feeds across the globe. The company provides information and insights on roughly 90% of the world’s pharmaceuticals. Its ability to standardize, organize and integrate this data via the application of analytics and global technology infrastructure strengthens its client base.
IQV has a strong healthcare-specific global IT infrastructure, analytics-driven clinical development capabilities, a robust real-world solutions ecosystem, and a growing set of proprietary clinical and commercial applications that help it progress and retain relationships with healthcare stakeholders.
IQVIA’s research and development capabilities, coupled with commercial services, have been helping it develop trusted relationships, resulting in a diversified base of above 10,000 clients in more than 100 nations.
The company has a consistent record of share repurchases. In 2021, 2022 and 2023, IQVIA repurchased shares worth $406 million, $1.17 billion and $992 million, respectively. This strategy often boosts investor morale, thereby improving business confidence.
Risks Faced by IQV
Pharma giants continue to apply pricing pressure on IQVIA’s operations, affecting its Technology and Analytics Solutions, and Research & Development Solutions divisions. Clients who are more cautious in budgeting engage in difficult price negotiation frequently. Various factors, including broader economic uncertainties and the need to optimize their spending, drive such budgetary conservatism.
As a result, IQVIA faces the challenge of balancing competitive pricing while maintaining profitability, as clients demand more cost-effective solutions without compromising the quality of services provided across these key segments.
IQVIA’s current ratio (a measure of liquidity) at the end of third-quarter 2024 was 0.81, lower than the industry’s 1.94. A current ratio of less than 1 often indicates that a company may have problems paying off its short-term obligations.
Image Source: Zacks Investment Research
IQV’s Zacks Rank & Stocks to Consider
IQVIA carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks in the broader Zacks Business Services sector are ABM Industries (ABM – Free Report) and Amadeus IT Group (AMADY – Free Report) .
ABM Industries has a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ABM has a long-term earnings growth expectation of 5.2%. It delivered a trailing four-quarter earnings surprise of 11.6%, on average.
Amadeus IT Group carries a Zacks Rank of 2 at present. It has a long-term earnings growth expectation of 9.4%.
AMADY delivered a trailing four-quarter earnings surprise of 7%, on average.
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