Examining IQVIA Holdings Inc’s (NYSE:IQV) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess IQV’s latest performance announced on 31 March 2018 and weigh these figures against its longer term trend and industry movements. See our latest analysis for IQVIA Holdings
How Did IQV’s Recent Performance Stack Up Against Its Past?IQV’s trailing twelve-month earnings (from 31 March 2018) of US$1.28b has more than doubled from US$115.00m in the prior year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 22.46%, indicating the rate at which IQV is growing has accelerated. What’s the driver of this growth? Well, let’s take a look at if it is solely because of an industry uplift, or if IQVIA Holdings has experienced some company-specific growth.
In the past couple of years, IQVIA Holdings increased its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US life sciences industry has been growing its average earnings by double-digit 10.35% over the previous twelve months, and 19.64% over the previous five years. This growth is a median of profitable companies of 25 Life Sciences companies in US including Deltagen, Waters and Agilent Technologies. This means any uplift the industry is deriving benefit from, IQVIA Holdings is able to leverage this to its advantage.In terms of returns from investment, IQVIA Holdings has not invested its equity funds well, leading to a 15.37% return on equity (ROE), below the sensible minimum of 20%. However, its return on assets (ROA) of 7.05% exceeds the US Life Sciences industry of 5.74%, indicating IQVIA Holdings has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for IQVIA Holdings’s debt level, has declined over the past 3 years from 26.49% to 2.11%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from -183.65% to 123.66% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While IQVIA Holdings has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research IQVIA Holdings to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for IQV’s future growth? Take a look at our free research report of analyst consensus for IQV’s outlook.
- Financial Health: Is IQV’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.