Medpace Holdings, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

There's been a notable change in appetite for Medpace Holdings, Inc. (NASDAQ:MEDP) shares in the week since its quarterly report, with the stock down 13% to US$382. The result was positive overall - although revenues of US$528m were in line with what the analysts predicted, Medpace Holdings surprised by delivering a statutory profit of US$2.75 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Medpace Holdings

Taking into account the latest results, the current consensus from Medpace Holdings' ten analysts is for revenues of US$2.14b in 2024. This would reflect a satisfactory 5.6% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 5.2% to US$11.56. Before this earnings report, the analysts had been forecasting revenues of US$2.17b and earnings per share (EPS) of US$11.25 in 2024. So the consensus seems to have become somewhat more optimistic on Medpace Holdings' earnings potential following these results.

The average the analysts price target fell 6.3% to US$403, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Medpace Holdings analyst has a price target of US$435 per share, while the most pessimistic values it at US$296. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 12% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.5% annually. Even after the forecast slowdown in growth, it seems obvious that Medpace Holdings is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Medpace Holdings' earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Medpace Holdings' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com