We came across a bullish thesis on Medpace Holdings, Inc. on FluentInQuality’s Substack. In this article, we will summarize the bulls’ thesis on MEDP. Medpace Holdings, Inc.'s share was trading at $530.30 as of October 6th. MEDP’s trailing and forward P/E were 39.83 and 36.23 respectively according to Yahoo Finance. 10 Countries with the Longest Life Expectancy in 2023 Pixabay/Public Domain Medpace is a global, full-service clinical research organization (CRO) serving biotech, pharmaceutical, and medica ...

Core Insights - The Giverny Capital Asset Management ("GCAM") model portfolio showed a net return of 6.79% for Q3 2025, underperforming the S&P 500 TR which returned 8.12% during the same period [2][4] - Significant declines in key holdings, particularly Constellation Software, which dropped 18% in September due to the sudden retirement of its CEO, Mark Leonard, impacted overall portfolio performance [4][5] - The investment landscape is characterized by a mix of economic uncertainty and stock market exuberance, with concerns about tariffs and the agricultural sector, yet enthusiasm for AI investments remains high [6][7] Performance Overview - The portfolio's year-to-date return stands at 12.57%, trailing the S&P 500's 14.83% [2] - Over the past three years, the portfolio has achieved an annualized return of 24.05%, while the S&P 500 has returned 24.94% [2] - The portfolio's largest holdings include Arista Networks, Alphabet, and Meta Platforms, which collectively represent a significant portion of the total assets [30] Key Holdings and Transactions - The portfolio initiated a 3.5% position in Taiwan Semiconductor (TSM), which is positioned as a leading manufacturer in the semiconductor industry, capitalizing on the growing demand for high-performance chips [19][21] - Medpace Holdings, a contract research organization, saw a substantial increase in stock value, rising over 50% in one day following a strong earnings report [11][12] - The portfolio has trimmed positions in several strong performers, including Alphabet and Meta, while fully exiting Credit Acceptance due to concerns over its competitive position [25] Market Context - The semiconductor industry is experiencing rapid advancements, with TSMC leading in manufacturing capabilities, particularly in producing chips at smaller nanometer specifications [20][22] - The market is currently focused on AI-related stocks, which have significantly contributed to S&P 500 returns since the launch of ChatGPT in November 2022 [13][14] - Concerns about geopolitical risks, particularly regarding Taiwan, are prevalent, as TSMC is a critical supplier for major tech companies [22][24] Investment Philosophy - The portfolio emphasizes investments in companies with founder involvement in management, which is believed to align interests and foster strong corporate cultures [8] - The management team expresses confidence in the quality of their holdings and the leadership of companies like Medpace and TSMC, despite broader market uncertainties [7][12] - The approach remains cautious regarding the sustainability of the current market rally, with a focus on long-term value creation rather than short-term speculation [7][26]

Company Performance - Medpace (MEDP) closed at $521.21, reflecting a +1.34% increase from the previous day, outperforming the S&P 500's decline of 0.63% [1] - Over the past month, Medpace shares have risen by 3.31%, surpassing the Medical sector's gain of 3.09% and the S&P 500's gain of 0.92% [1] Upcoming Earnings - Medpace is set to release its earnings on October 22, 2025, with an expected EPS of $3.5, representing a 16.28% increase year-over-year [2] - The consensus estimate for revenue is $640.45 million, indicating a 20.09% growth compared to the same quarter last year [2] Annual Estimates - For the annual period, the Zacks Consensus Estimates project earnings of $14.03 per share and revenue of $2.46 billion, reflecting increases of +11.08% and +16.86% respectively from the previous year [3] Analyst Revisions - Recent changes to analyst estimates for Medpace indicate a favorable outlook on the company's business health and profitability [3] - The Zacks Rank system, which incorporates these estimate changes, suggests potential stock price performance [4] Valuation Metrics - Medpace has a Forward P/E ratio of 36.65, which is a premium compared to the industry average Forward P/E of 17.34 [5] - The PEG ratio for Medpace is currently 3.23, compared to the average PEG ratio of 1.73 for the Medical Services industry [6] Industry Ranking - The Medical Services industry, which includes Medpace, has a Zacks Industry Rank of 96, placing it in the top 39% of over 250 industries [6][7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Insights - Vulcan Value Partners reported positive absolute performance across all strategies in Q3 2025, with the All-Cap Composite leading at 5.5% net return [1] - Medpace Holdings, Inc. (NASDAQ:MEDP) was highlighted as a significant contributor to performance, with a one-month return of 2.47% and a 52-week gain of 50% [2][3] Performance Summary - Large Cap Composite returned 4.6% net of fees and expenses - Small Cap Composite returned 4.1% net - Focus Composite returned 3.7% net - Focus Plus Composite returned 3.7% net - All-Cap Composite returned 5.5% net [1] Medpace Holdings, Inc. Insights - Medpace reported strong Q2 results with revenue growth at a mid-teens rate and operating earnings up 20% year over year [3] - The company repurchased nearly 6% of outstanding shares during the quarter, enhancing its earnings outlook for the full year [3] - Positive trends such as a better biotech funding environment and faster client decision-making are expected to drive accelerated growth for Medpace [3] - The share price rose faster than the estimated value, leading to a strategic trimming of the position in the portfolio [3]

Core Insights - Headwaters Capital Management's third-quarter 2025 investor letter focused on AI and reported a portfolio return of -2.7% compared to a +5.3% gain for the Russell Mid Cap Index [1] Company Performance - Medpace Holdings, Inc. (NASDAQ:MEDP) was highlighted as a top contributor with a return of +64% in the quarter, driven by strong bookings despite a challenging biotech funding environment [3] - Medpace's stock closed at $527.40 on October 13, 2025, with a market capitalization of $14.816 billion, and it experienced a one-month return of 7.46% and a 49.28% increase over the last 52 weeks [2] - The company reported revenue of $603.3 million in the second quarter of 2025, marking a 14.2% year-over-year increase [4] Investment Strategy - Headwaters Capital Management noted that Medpace's disciplined capital allocation and market share gains make it a core long-term holding, despite the cyclical nature of its end markets [3] - The firm indicated that while Medpace has potential, certain AI stocks may offer greater upside potential with less downside risk [4]

Core Insights - Medpace (MEDP) is positioned to continue its earnings-beat streak, particularly in the upcoming earnings report, supported by a strong history of exceeding earnings estimates [1][5] - The company has an average surprise of 11.63% over the past two quarters, indicating consistent performance above expectations [1][5] Earnings Performance - For the most recent quarter, Medpace reported earnings of $3.1 per share, surpassing the expected $3 per share by 3.33% [2] - In the previous quarter, the company reported $3.67 per share against a consensus estimate of $3.06 per share, resulting in a surprise of 19.93% [2] Earnings Estimates and Predictions - Recent estimates for Medpace have been revised upward, with a positive Earnings ESP of +4.49%, suggesting increased analyst optimism regarding its near-term earnings potential [5][8] - The combination of a positive Earnings ESP and a Zacks Rank of 2 (Buy) indicates a strong likelihood of another earnings beat in the upcoming report scheduled for October 22, 2025 [8] Statistical Insights - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [6] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions prior to earnings releases [7]

Group 1 - Medpace (MEDP) has returned 59.8% year-to-date, significantly outperforming the Medical sector, which has gained about 1.8% on average [4] - Medpace holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook with a consensus estimate for full-year earnings moving 10.4% higher in the past quarter [3] - The Medical Services industry, to which Medpace belongs, has lost an average of 0.3% so far this year, further highlighting Medpace's strong performance [5] Group 2 - Black Diamond (BDTX) is another Medical stock that has outperformed the sector with a year-to-date return of 86.5% and holds a Zacks Rank of 1 (Strong Buy) [4][5] - The Medical - Biomedical and Genetics industry, which includes Black Diamond, has gained 8.7% year-to-date and is currently ranked 96 [6] - Investors interested in Medical stocks should closely monitor both Medpace and Black Diamond for continued strong performance [6]

Core Insights - The article compares two Medical Services stocks, Solventum (SOLV) and Medpace (MEDP), to determine which offers better value for investors [1] Valuation Metrics - Solventum has a Zacks Rank of 1 (Strong Buy), indicating a stronger earnings outlook compared to Medpace, which has a Zacks Rank of 3 (Hold) [3] - SOLV's forward P/E ratio is 12.56, significantly lower than MEDP's forward P/E of 38.33, suggesting SOLV is more attractively priced [5] - The PEG ratio for SOLV is 3.03, while MEDP's PEG ratio is 3.37, indicating SOLV may offer better value relative to its expected earnings growth [5] - SOLV's P/B ratio is 3.54, compared to MEDP's P/B of 87.39, further highlighting SOLV's relative valuation advantage [6] - Based on these metrics, SOLV holds a Value grade of B, while MEDP has a Value grade of D, indicating a stronger value proposition for SOLV [6] Earnings Outlook - SOLV is noted for its improving earnings outlook, which enhances its attractiveness in the Zacks Rank model, positioning it as the superior value option at present [7]

Company Performance - Medpace (MEDP) closed at $536.17, down 1.42% from the previous session, underperforming the S&P 500's gain of 0.06% [1] - Over the past month, Medpace shares have increased by 13.02%, outperforming the Medical sector's gain of 5.06% and the S&P 500's gain of 3.94% [1] Upcoming Earnings - Medpace is set to release its earnings report on October 22, 2025, with an expected EPS of $3.49, reflecting a 15.95% increase from the same quarter last year [2] - The Zacks Consensus Estimate projects revenue of $640.76 million, up 20.14% from the previous year [2] Fiscal Year Estimates - For the entire fiscal year, earnings are estimated at $13.99 per share, indicating a 10.77% increase, while revenue is projected at $2.46 billion, showing a 16.83% increase from the prior year [3] Analyst Estimates - Recent changes in analyst estimates for Medpace are important as they indicate shifts in near-term business trends, with positive changes reflecting analyst optimism [3][4] Zacks Rank and Valuation - Medpace currently holds a Zacks Rank of 3 (Hold), with the Zacks Rank system historically outperforming, particularly stocks rated 1 [5] - The Forward P/E ratio for Medpace is 38.88, significantly higher than the industry average of 17.12, and the PEG ratio stands at 3.42 compared to the industry average of 1.64 [6] Industry Overview - The Medical Services industry, part of the Medical sector, has a Zacks Industry Rank of 135, placing it in the bottom 46% of all industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Group 1 - Barclays downgraded Medpace Holdings Inc. from Equalweight to Underweight and reduced its price target to $425.00 from $450.00 [1] - The downgrade was primarily valuation-driven, with Medpace shares trading above the historical premium relative to peers [1] - The biotech market is described as "bouncing along the bottom," but the company is expected to continue winning new business [1] Group 2 - Potential risk is flagged for the second half of 2026 regarding Medpace's ability to fill its backlog with faster-burning projects [2] - There are concerns about sustaining elevated growth as more traditional work ramps up [2]