Medpace is Wednesday's selection for IBD 50 Stocks To Watch as the health care player ventures into a buy zone. MEDP stock is moving in fits and starts within a rather wonky cup-with-handle base, but now is starting to break out.
Medpace provides clinical research based drug development and medical research support services. The company partners with drug, biotechnology and medical device manufacturing businesses to help with clinical trials.
Shares of Medpace have gapped up in strong volume since the stock's handle started forming on Oct. 24. That's when it reported third- quarter results and cleared its 50-day moving average.
The price action gave the stock a slightly lower handle entry, according to IBD MarketSmith. Now its shares have moved above a buy point of 272.89. Medpace's relative strength line also is at a 52-week high, and MEDP stock is approaching its all-time high of 282.73, when the first stages of the cup started forming.
Twice The S&P 500s Gain
Medpace holds a 29% gain year to date, slightly more than twice the S&P 500's 14% growth. Its overall Composite Rating stands at 91 while the EPS Rating comes in a bit higher at 96. Medpace's Relative Strength Rating of 93 is also a show of technical strength.
Sales growth has ranged between 26% and 31% over the past seven quarters. Earnings have been more wide ranging, from 8% to as high as 61%.
Third-quarter revenue increased 28% to $493 million while earnings of $2.22 a share represented an 8% gain. Revenue grew in most therapeutic areas from the prior year quarter.
For the full year, the company expects midpoint revenue of $1.88 billion which would be a 29% increase from 2022. For fiscal 2024, revenue is seen increasing to $2.2 billion.
MEDP Stock Ranks First In Group
MEDP stock ranks first in IBD's Medical Research Equipment and Services industry group. The company's central laboratory supports clinical trials in all phases, through services such as trial management and monitoring. It also provides testing methodologies to assess study feasibility and other services.
Core labs provide imaging and cardiovascular research and services support. Its support for early clinical trials include research stages such as "first in human", "dose escalation", "drug-drug interaction", and "proof of concept."
Mutual funds have been piling into the stock over the past five quarters in increasing numbers. Among top funds, the Invesco Discovery Fund (OPOCX) and the Fidelity Contrafund (FCNTX) hold shares of MEDP stock.
Exchange traded funds hold the stock as well. The iShares Russell Mid-Cap Growth ETF and the Invesco Dorsey Wright Momentum ETF are among Medpace investors.
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