Yahoo Finance Medpace Holdings, Inc. Just Beat EPS By 30%: Here's What Analysts Think Will Happen Next
It's been a good week for Medpace Holdings, Inc. (NASDAQ:MEDP) shareholders, because the company has just released its latest first-quarter results, and the shares gained 6.5% to US$407. It looks like a credible result overall - although revenues of US$511m were what the analysts expected, Medpace Holdings surprised by delivering a (statutory) profit of US$3.20 per share, an impressive 30% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Medpace Holdings
After the latest results, the eight analysts covering Medpace Holdings are now predicting revenues of US$2.18b in 2024. If met, this would reflect a decent 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 9.0% to US$11.01. In the lead-up to this report, the analysts had been modelling revenues of US$2.19b and earnings per share (EPS) of US$10.57 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at US$419, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Medpace Holdings analyst has a price target of US$480 per share, while the most pessimistic values it at US$261. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Medpace Holdings shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Medpace Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.2% per year. So it's pretty clear that, while Medpace Holdings' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Medpace Holdings following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Medpace Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Medpace Holdings analysts - going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Medpace Holdings you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
