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Medpace Holdings (MEDP)
NASDAQ:MEDP
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Medpace Holdings
(NASDAQ:MEDP)73Outperform
Positive Factors
Cash Flow
Free cash flow was strong, surpassing consensus estimates by a significant margin, indicating robust cash generation.
Financial Performance
MEDP's earnings per share and EBITDA significantly exceeded analyst expectations, driven by better-than-expected cost management.
Negative Factors
Market Challenges
MEDP noticed a level of heightened competition in the biotech space, presenting a challenge.
Medpace Holdings (MEDP) vs. S&P 500 (SPY)
Market Cap
$10.14B
Dividend YieldN/A
Average Volume (3M)341.13K
Price to Earnings (P/E)26.3
Beta (1Y)1.41
Revenue Growth11.84%
EPS Growth42.04%
CountryUS
Employees5,900
SectorHealthcare
Sector Strength74
IndustryMedical Diagnostics & Screening
Share Statistics
EPS (TTM)12.63
Shares Outstanding30,466,806
10 Day Avg. Volume387,727
30 Day Avg. Volume341,125
Financial Highlights & Ratios
PEG Ratio0.63
Price to Book (P/B)N/A
Price to Sales (P/S)4.81
Price to Cash Flow (P/CF)13.30
P/FCF Ratio13.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$364.00Price Target Upside9.37% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Medpace Holdings Business Overview & Revenue Model
Company DescriptionMedpace Holdings, Inc. (MEDP) is a full-service clinical contract research organization (CRO) that provides comprehensive development services for biopharmaceutical and medical device industries. The company specializes in the design and execution of clinical trials, offering services that include study management, regulatory consulting, and medical writing. Medpace operates globally, supporting clients with the development and commercialization of new treatments and technologies across various therapeutic areas, including oncology, cardiology, metabolic disease, and infectious disease.
How the Company Makes MoneyMedpace Holdings generates revenue primarily through its clinical research services, which are contracted by pharmaceutical, biotechnology, and medical device companies seeking to conduct clinical trials. The company's revenue model is based on contracts with clients, where it charges fees for managing and executing different phases of clinical trials. These services include project management, clinical monitoring, data management, and regulatory affairs consulting. Medpace's growth is supported by its ability to maintain long-term relationships with clients, leveraging its expertise in complex therapeutic areas to secure repeat business. Additionally, the company benefits from the rising demand for outsourced clinical development services, driven by increased research and development spending in the healthcare sector.
Medpace Holdings Financial Statement Overview
Summary
Medpace Holdings exhibits very strong financial performance with impressive growth, profitability, and cash generation. The company maintains high revenue growth, robust margins, and effective cash management while managing its balance sheet conservatively with low leverage.Income Statement
Medpace Holdings demonstrates strong financial performance with consistent revenue growth and robust profitability margins. The gross profit margin and net profit margin have shown substantial improvement over the years, with a recent net profit margin of 19.2% in 2024. The company has maintained a solid EBIT margin of 21.2% and EBITDA margin of the same percentage, indicating efficiency in operations. Revenue growth has been impressive, with a growth rate of 11.8% from 2023 to 2024, showcasing a positive trajectory.92
Very Positive
Balance Sheet
The balance sheet of Medpace Holdings reflects a strong financial position with a low debt-to-equity ratio of 0.15 in 2024, indicating low leverage. The return on equity (ROE) is robust at 49.0%, highlighting effective use of shareholders' equity in generating profits. The equity ratio stands at 39.3%, suggesting a stable proportion of equity financing. Overall, the balance sheet portrays a healthy mix of assets and liabilities, with substantial equity backing.88
Very Positive
Cash Flow
Cash flow analysis for Medpace Holdings shows excellent management of cash resources, with a significant operating cash flow to net income ratio of 1.5 in 2024, indicating strong cash generation relative to earnings. Free cash flow growth is notable at 53.4% from 2023 to 2024, demonstrating efficiency in capital expenditures and cash management. The free cash flow to net income ratio of 1.5 reinforces the company's ability to sustain operations and growth.90
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.11B | 1.89B | 1.46B | 1.14B | 925.92M | Gross Profit |
| 656.30M | 524.50M | 432.44M | 328.15M | 278.73M | EBIT |
| 446.87M | 336.82M | 278.70M | 198.62M | 167.04M | EBITDA |
| 446.87M | 363.15M | 301.04M | 219.73M | 186.57M | Net Income Common Stockholders |
| 404.39M | 282.81M | 245.21M | 181.39M | 144.93M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 669.44M | 245.45M | 28.27M | 461.30M | 277.77M | Total Assets |
| 2.10B | 1.66B | 1.35B | 1.66B | 1.39B | Total Debt |
| 126.23M | 142.12M | 188.87M | 130.97M | 115.14M | Net Debt |
| -543.20M | -103.33M | 160.60M | -330.34M | -162.62M | Total Liabilities |
| 1.28B | 1.10B | 966.11M | 707.01M | 584.90M | Stockholders Equity |
| 825.54M | 558.95M | 386.39M | 952.93M | 805.78M |
| Cash Flow | Free Cash Flow | |||
| 608.82M | 396.73M | 351.17M | 235.06M | 227.34M | Operating Cash Flow |
| 608.82M | 433.37M | 388.05M | 263.33M | 258.68M | Investing Cash Flow |
| -28.31M | -34.63M | -38.74M | -31.36M | -31.21M | Financing Cash Flow |
| -154.01M | -182.64M | -775.77M | -44.45M | -82.28M |
Medpace Holdings Technical Analysis
Negative
332.81
Price Trends
341.12
Negative
340.22
Negative
361.04
Negative
Market Momentum
-4.62
Positive
47.13
Neutral
39.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MEDP, the sentiment is Negative. The current price of 332.81 is below the 20-day moving average (MA) of 336.71, below the 50-day MA of 341.12, and below the 200-day MA of 361.04, indicating a bearish trend. The MACD of -4.62 indicates Positive momentum. The RSI at 47.13 is Neutral, neither overbought nor oversold. The STOCH value of 39.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MEDP.
Medpace Holdings Risk Analysis
Medpace Holdings disclosed 37 risk factors in its most recent earnings report. Medpace Holdings reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Medpace Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $10.14B | 26.34 | 58.41% | ― | 11.84% | 42.04% | |
70 Outperform | $32.70B | 25.56 | 22.55% | ― | 2.95% | 2.46% | |
61 Neutral | $9.00B | 685.85 | 0.45% | ― | -1.92% | -96.95% | |
55 Neutral | ― | 12.60% | ― | ― | ― | ||
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
MEDP
Medpace Holdings
332.81
-70.53
-17.49%
CRL
Charles River Labs
175.92
-87.17
-33.13%
IQV
IQVIA Holdings
191.63
-66.95
-25.89%
ICON
Icon Energy Corp.
0.17
-3.11
-94.82%
Medpace Holdings Earnings Call Summary
Earnings Call Date: Feb 10, 2025 | % Change Since: -6.12% | Next Earnings Date: Apr 28, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While the company achieved significant revenue and income growth in 2024, challenges such as a weak book-to-bill ratio, decrease in new business awards, and elevated cancellations pose concerns for 2025. The guidance for 2025 indicates a cautious outlook with flat to modest revenue growth expected.Highlights
Revenue Growth
Fourth quarter revenue was $536.6 million, a year-over-year increase of 7.7%. Full year 2024 revenue was $2.11 billion, an 11.8% increase from 2023.
EBITDA and Net Income Growth
Fourth quarter EBITDA was $133.5 million, a 39.3% increase compared to Q4 2023. Full year EBITDA was $480.2 million, a 32.5% increase from 2023. Net income for Q4 was $117 million, a 49.5% increase compared to Q4 2023.
Improved EBITDA Margin
EBITDA margin in Q4 was 24.9%, up from 19.2% in the prior year period. Full year EBITDA margin was 22.8% compared to 19.2% in 2023.
Strong Cash Flow
Generated $190.7 million in cash flow from operating activities in Q4, with $669.4 million in cash as of December 31, 2024.
Lowlights
Weak Book-to-Bill Ratio
The book-to-bill ratio for Q4 was 0.99, indicating challenges in new bookings relative to billings.
Decrease in Net New Business Awards
Net new business awards for Q4 decreased by 13.8% compared to the prior year, totaling $529.7 million.
Elevated Cancellations
High level of cancellations experienced in 2024, impacting growth prospects for 2025.
Flat Revenue Guidance for 2025
Guidance for 2025 projects total revenue between $2.11 billion to $2.21 billion, implying flat to 4.8% growth.
Company Guidance
During Medpace Holdings, Inc.'s fourth quarter and full year 2024 earnings call, the company provided guidance for 2025, projecting total revenue between $2.11 billion and $2.21 billion, representing flat to 4.8% growth over 2024's $2.11 billion revenue. The EBITDA is expected to range from $462 million to $492 million, indicating a decline of 3.8% to growth of 2.5% compared to 2024's $480.2 million. Net income is forecasted between $378 million and $402 million, with an effective tax rate of 18% to 19%. The earnings per diluted share are anticipated to be between $11.93 and $12.69. The company aims to achieve a book-to-bill ratio above 1.15 in the second half of the year, despite a challenging backdrop due to high cancellations in 2024 and a slightly weakened business environment.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.