Stock Analysis

Why IQVIA Holdings Inc. (NYSE:IQV) Could Be Worth Watching

NYSE:IQV
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Today we're going to take a look at the well-established IQVIA Holdings Inc. (NYSE:IQV). The company's stock led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine IQVIA Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for IQVIA Holdings

What's The Opportunity In IQVIA Holdings?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 20% below my intrinsic value, which means if you buy IQVIA Holdings today, you’d be paying a fair price for it. And if you believe that the stock is really worth $277.15, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that IQVIA Holdings’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of IQVIA Holdings look like?

earnings-and-revenue-growth
NYSE:IQV Earnings and Revenue Growth August 11th 2023

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. IQVIA Holdings' earnings over the next few years are expected to increase by 75%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in IQV’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on IQV, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing IQVIA Holdings at this point in time. Be aware that IQVIA Holdings is showing 2 warning signs in our investment analysis and 1 of those is potentially serious...

If you are no longer interested in IQVIA Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.