Iqvia stock bolted higher Monday after the contract research firm raised its outlook for the year on the back of unexpected strength from its technology and analytics business.
During the June quarter, the technology and analytics solutions segment, which Iqvia refers to as TAS, brought in nearly $1.5 billion in sales, up 2.7% on a strict, as-reported basis. In constant currency, TAS sales climbed 3.8% year over year and beat forecasts by $29 billion, William Blair analyst Max Smock said in a report.
The TAS division provides information and technology services to pharma and health companies. But the business has struggled recently.
"Iqvia has underperformed so far in 2024 due to skepticism around the timing and pace of recovery in its TAS business, so we are not surprised to see the stock up nearly 5% premarket on the back of the better-than-expected segment results in the quarter," Smock said in a report.
At the stock market's close, Iqvia stock launched 9.2% to 245.23. Shares are consolidating with a buy point at 261.73, according to MarketSurge.
Iqvia TAS Offsets A Key Miss
Iqvia's second-quarter sales rose 2.3% on a strict, as-reported basis to $3.81 billion. In constant currency, sales rose 3.5%. The top line beat forecasts for $3.78 billion to $3.79 billion, Smock said. Adjusted earnings were $2.64 per share, up 8.6% year over year and above calls for $2.57 a share, according to FactSet.
The better-than-expected TAS sales helped offset a roughly $5 million miss from the research and development solutions business. Sales in that segment were $2.15 billion, up 2.4% on a reported basis and 3.3% excluding the impact of exchange rates.
Notably, bookings in the research and development solutions business came in slightly short. Iqvia had a 1.27 times book-to-bill ratio, lagging expectations for 1.3 times, Smock said. Overall, though, the 1.27 ratio "is still solid," he said.
Iqvia raised its sales outlook for the year by $25 million at the midpoint. The company now expects about $15.43 billion to $15.53 billion in sales. Iqvia also guided to adjusted earnings of $11.10 to $11.30 a share this year. That's an increase of 10 cents at the midpoint from its previous guidance.
Smock kept his outperform rating on Iqvia stock.
"We continue to believe Iqvia's strong competitive positioning and healthy (research and development solutions) business makes the company a solid investment," he said.
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