Let’s talk about the popular IQVIA Holdings Inc (NYSE:IQV). The company’s shares received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $130.77 at one point, and dropping to the lows of $115.24. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether IQVIA Holdings’s current trading price of $117.73 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at IQVIA Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is IQVIA Holdings worth?The stock seems fairly valued at the moment according to my valuation model. It’s trading around 5.04% above my intrinsic value, which means if you buy IQVIA Holdings today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $112.08, there’s only an insignificant downside when the price falls to its real value. Furthermore, it seems like IQVIA Holdings’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from IQVIA Holdings?Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of IQVIA Holdings, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? Currently, IQV appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on IQV for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on IQV should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on IQVIA Holdings. You can find everything you need to know about IQVIA Holdings in the latest infographic research report. If you are no longer interested in IQVIA Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.