Core Viewpoint - Medpace (MEDP) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][2]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the importance of changing earnings estimates in determining stock price movements, making it a valuable tool for investors [2][3]. - A strong correlation exists between earnings estimate revisions and near-term stock movements, with institutional investors playing a role in this relationship by adjusting their valuations based on earnings estimates [3]. Medpace's Earnings Outlook - Medpace is projected to earn $14.79 per share for the fiscal year ending December 2025, with no year-over-year change expected [7]. - Over the past three months, the Zacks Consensus Estimate for Medpace has increased by 5.7%, reflecting analysts' positive revisions [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [6]. - Medpace's upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9].

Core Insights - Three stocks are highlighted with strong buy rankings and positive momentum characteristics for investors to consider on October 28th Company Summaries Medpace (MEDP) - Medpace is a global, full-service clinical contract research organization providing Phase I-IV clinical development services to the biotechnology, pharmaceutical, and medical device industries - The company has a Zacks Rank of 1 (Strong Buy) and the Zacks Consensus Estimate for its current year earnings has increased by 3.6% over the last 60 days - Medpace's shares have gained 31.7% over the last three months, significantly outperforming the S&P 500's gain of 7.6%, and it possesses a Momentum Score of A [1][2] Vertiv (VRT) - Vertiv is a leading global provider of critical digital infrastructure and services for data centers, communication networks, and commercial and industrial environments - The company also holds a Zacks Rank of 1 and has seen the Zacks Consensus Estimate for its current year earnings increase by 7.6% over the last 60 days - Vertiv's shares have increased by 35.4% over the last three months, again outperforming the S&P 500's gain of 7.6%, and it has a Momentum Score of A [2][3] TakeTwo Interactive Software (TTWO) - TakeTwo Interactive Software is a leading developer and publisher of video games - The company has a Zacks Rank of 1, with the Zacks Consensus Estimate for its current year earnings rising by 0.7% over the last 60 days - TakeTwo's shares have gained 12.4% over the last three months, surpassing the S&P 500's gain of 7.6%, and it has a Momentum Score of B [3][4]

Core Insights - Medpace's shares increased by 13% this week, reflecting strong growth in its latest quarter and an optimistic outlook from investors [1] - The clinical trial industry is recovering post-COVID-19, contributing to Medpace's financial performance [2][4] Financial Performance - Medpace reported a revenue growth of 24% year over year, reaching $660 million, with a net income of $111 million [2] - The company's backlog has reached $3 billion, indicating strong demand for its services [4] Book-to-Bill Ratio - Medpace's book-to-bill ratio was 1.2x in the third quarter, suggesting that new contract wins are outpacing existing orders fulfilled, which is a positive sign for future growth [3][4] Stock Performance - Medpace's stock has increased over 100% since the beginning of the year, with a current price-to-earnings (P/E) ratio of 44.5, up from 24 earlier this year [7][9] - The company has experienced a remarkable revenue increase of 1,000% since going public in 2016 [6]

Core Insights - Medpace Holdings Inc. reported better-than-expected third-quarter earnings, with earnings of $3.86 per share, surpassing the consensus estimate of $3.52 [1] - The company's sales reached $659.9 million, exceeding the consensus of $640.99 million, marking a year-over-year increase of 23.7% [1] - On a constant currency basis, revenue increased by 23.4% [1] Financial Guidance - Medpace raised its fiscal 2025 earnings per share guidance from a range of $13.76-$14.53 to $14.60-$14.86, compared to the consensus of $14.07 [2] - The sales guidance for 2025 was also increased from $2.42 billion-$2.52 billion to $2.48 billion-$2.53 billion, against a consensus of $2.46 billion [2] Stock Performance - Following the earnings announcement, Medpace shares rose by 1% to trade at $602.08 [2] - Analysts adjusted their price targets for Medpace, with Mizuho maintaining an Outperform rating and raising the target from $575 to $655, while Barclays maintained an Underweight rating and increased the target from $425 to $485 [4]

Group 1 - The article discusses the Biotech Analysis Central service, which provides in-depth analysis of pharmaceutical companies and offers a model portfolio of small and mid-cap stocks [1][2] - The service includes over 600 biotech investing articles and live chat features to assist healthcare investors in making informed decisions [2] - A promotional offer is available for new subscribers, including a two-week free trial and a discounted annual subscription price [1] Group 2 - The author of the article has no current stock or derivative positions in any mentioned companies and does not plan to initiate any within the next 72 hours [3] - The article expresses the author's personal opinions and is not compensated beyond the Seeking Alpha platform [3] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not reflect the platform's overall stance [4]

Core Insights - Medpace reported another strong quarter with significant sales and profit growth, leading to a guidance hike for the full year [2][7][9] Financial Performance - Medpace achieved adjusted earnings of $3.86 per share, exceeding expectations of $3.37, marking a growth of over 28% [7] - Revenue increased nearly 24% to $659.9 million, surpassing forecasts of $641 million, representing the third consecutive quarter of accelerating sales growth [7] - The company secured $789.6 million in new business awards, a 48% increase, resulting in a book-to-bill ratio of 1.2x, outperforming analyst expectations of 1.1x to 1.13x [3][4] Guidance and Outlook - Medpace raised its full-year earnings guidance to a range of $14.60 to $14.86 per share, an increase of approximately 59 cents at the midpoint from previous guidance [9] - The sales forecast was also adjusted to $2.48 billion to $2.53 billion, up from the previous range of $2.42 billion to $2.52 billion [9] Analyst Commentary - Analysts described the quarter as "flawless," with strong pull-through on revenue and new bookings exceeding expectations [2][3] - The significant increase in bookings over the last couple of quarters surprised analysts, indicating a positive trend in the biotech funding environment [5][6]

Revenue Performance - Revenue for the three months ended September 30, 2025, was $659.9 million, representing a 23.7% increase from $533.3 million in the same period of 2024[84] - Total revenue increased by $126.6 million to $659.9 million for the three months ended September 30, 2025, representing a 23.7% growth compared to the same period in 2024[87] - Total revenue for the nine months ended September 30, 2025, rose by $249.3 million to $1,821.8 million, reflecting a 15.9% increase year-over-year[85] Costs and Expenses - Total direct costs for the three months ended September 30, 2025, increased by 27.1% to $463.0 million, up from $364.3 million in the prior year[84] - Total direct costs increased by $98.7 million to $463.0 million for the three months ended September 30, 2025, a 27.1% increase compared to the same period in 2024[88] - Total direct costs rose by $172.0 million to $1,266.5 million for the nine months ended September 30, 2025, a 15.7% increase year-over-year[88] - Selling, general and administrative expenses decreased by 2.3% to $48.1 million for the three months ended September 30, 2025, down from $49.2 million in 2024[84] - Selling, general and administrative expenses increased by $17.9 million to $152.6 million for the nine months ended September 30, 2025, marking a 13.3% rise compared to the previous year[89] - Reimbursed out-of-pocket expenses rose by 43.5% to $276.6 million for the three months ended September 30, 2025, compared to $192.8 million in 2024[84] - Reimbursed out-of-pocket expenses rose by $83.9 million and $136.6 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in the prior year[88] Profitability - Net income for the three months ended September 30, 2025, was $111.1 million, an increase of 15.3% from $96.4 million in the same period of 2024[84] - Net income for the nine months ended September 30, 2025, was $315.99 million, up from $287.37 million in 2024, reflecting an increase of $28.62 million[85] - Income before income taxes for the three months ended September 30, 2025, was $142.8 million, up from $118.8 million in the same period of 2024, marking a 20.2% increase[84] - Income tax provision increased by $14.9 million to $69.6 million for the nine months ended September 30, 2025, with an effective tax rate of 18.0% compared to 16.0% in 2024[94] - Income tax provision increased by $9.4 million to $31.7 million for the three months ended September 30, 2025, with an effective tax rate of 22.2%[94] Business Awards and Backlog - Net new business awards were $789.6 million for the three months ended September 30, 2025, compared to $533.7 million for the same period in 2024, reflecting a significant increase[79] - For the three months ended September 30, 2025, net new business awards were $789.6 million, compared to $533.7 million for the same period in 2024, representing a 47.9% increase[79] - For the nine months ended September 30, 2025, net new business awards were $1,910.2 million, compared to $1,700.3 million for the same period in 2024, representing a 12.3% increase[79] - Backlog as of September 30, 2025, increased by $73.2 million, or 2.5%, to $3,000.6 million compared to $2,927.4 million as of September 30, 2024[80] - Approximately $1,830.0 million to $1,850.0 million of the backlog is expected to convert to net revenue over the next twelve months[80] Cash Flow and Financing - Net cash provided by operating activities was $520.6 million for the nine months ended September 30, 2025, compared to $418.1 million in 2024, indicating a significant increase[101][102] - Cash and cash equivalents decreased to $285.4 million as of September 30, 2025, down from $669.4 million at the end of 2024, primarily due to stock repurchases[96] - The company repurchased 2,961,924 shares for $912.9 million during the nine months ended September 30, 2025, with remaining authorization of $821.7 million under the repurchase program[106] - Net cash used in financing activities for the nine months ended September 30, 2025, was $883.1 million, mainly due to $917.4 million in common stock repurchases[104] - As of September 30, 2025, the company had no indebtedness[108] Operational Insights - The company focuses on conducting clinical trials across major therapeutic areas, with particular strength in Oncology, Metabolic Disease, and Cardiology[66] - The global platform includes approximately 6,200 employees across 44 countries as of September 30, 2025[66] - The company utilizes a disciplined operating model centered on providing full-service Phase I-IV clinical development services[64] - The company expects to continue expanding operations through organic growth and selective bolt-on acquisitions, supported by cash flow from operations and existing credit facilities[98] Foreign Currency Impact - The average exchange rate for U.S. Dollars per Euro for the three months ended September 30, 2025, was 1.17, compared to 1.10 for the same period in 2024[83] - The average exchange rate for the Euro to U.S. Dollar was 1.17 for the three months ended September 30, 2025, compared to 1.10 for the same period in 2024[83] - The company reported favorable foreign currency adjustments of $2.6 million for the three months ended September 30, 2025, and $24.0 million for the nine months ended September 30, 2025[81] Accounting Policies - There have been no significant changes in critical accounting policies and estimates since the last annual report[110]

Core Insights - Medpace Holdings Inc. reported strong third-quarter earnings, with earnings per share of $3.86, exceeding the consensus estimate of $3.52, and sales of $659.9 million, surpassing the consensus of $640.99 million [1][2] - Year-over-year sales growth was 23.7%, and on a constant currency basis, revenue increased by 23.4% [1] - The company raised its fiscal 2025 earnings per share guidance to a range of $14.60-$14.86, compared to the previous range of $13.76-$14.53 and the consensus of $14.07 [2] Financial Performance - The backlog as of September 30, 2025, increased by 2.5% to approximately $3 billion [2] - Net new business awards for the third quarter were $789.6 million, resulting in a net book-to-bill ratio of 1.20x, compared to $533.7 million a year ago [2] - EBITDA for the third quarter rose by 24.9% to $148.4 million, representing 22.5% of revenue, compared to 22.3% a year ago [2] Market Sentiment - Analysts noted a significant increase in bookings, with net new business awards up about 30% sequentially and 60% from the first quarter of 2025 [5] - There is rising optimism in biotech funding, with indications that demand in the biotech sector has bottomed out and is beginning to improve [5] - Medpace appears to be benefiting from several large wins in the metabolic space, particularly related to GLP-1 [5]

Core Insights - The company's new orders increased significantly by 49% in the third quarter compared to the same period last year [1] Group 1 - The substantial growth in new orders indicates strong demand for the company's products and services [1]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $659.9 million, representing a year-over-year increase of 23.7% [5][6] - Year-to-date revenue as of September 30, 2025, was $1.82 billion, an increase of 15.9% [7] - EBITDA for Q3 2025 was $148.4 million, up 24.9% from $118.8 million in Q3 2024 [7][8] - Net income for Q3 2025 was $111.1 million, a 15.3% increase compared to $96.4 million in the prior year [8] - Full-year 2025 total revenue is expected to be in the range of $2.48 billion to $2.53 billion, representing growth of 17.6% to 20% over 2024 [9] Business Line Data and Key Metrics Changes - Net new business awards entering backlog in Q3 increased 47.9% year-over-year to $789.6 million, resulting in a net book-to-bill ratio of 1.20 [5][6] - Ending backlog as of September 30, 2025, was approximately $3 billion, a 2.5% increase from the prior year [5][6] Market Data and Key Metrics Changes - Pass-through costs are expected to remain high, representing between 41% and 42% of revenue [5] - The therapeutic mix has shifted to faster-burning studies, impacting the concentration of reimbursable costs [7] Company Strategy and Development Direction - The company is focused on refilling its pipeline of opportunities and anticipates low double-digit revenue growth for 2026 [4] - Management indicated that the pass-through costs may peak in Q4 2025 and then decrease in 2026 [14] - The company is experiencing a competitive environment with an increase in the number of CROs bidding for projects, but maintains a strong competitive position [49][50] Management's Comments on Operating Environment and Future Outlook - Management noted that cancellations have been a significant factor affecting business, rather than a weak funding environment [25] - The overall business environment remains stable, with improvements in funding and fewer cancellations expected to continue [41] - Management expressed confidence in the ability to convert backlog into revenue, with a larger pre-backlog bucket of awarded studies [22][39] Other Important Information - The company repurchased approximately 14,649 shares for $4.5 million in Q3 2025, with $821.7 million remaining under the share repurchase authorization program [8][9] - The effective tax rate for 2025 is projected to be between 18.25% and 18.75% [9] Q&A Session Summary Question: How should we think about the pass-throughs in relation to the increase in metabolic work? - Management indicated that pass-through costs are expected to level off and may decrease in 2026, driven by the timing of projects and the nature of new studies [12][14] Question: Why is the EBITDA growth lower than revenue growth? - The primary driver for the lower EBITDA growth is attributed to pass-through costs, along with other challenges such as exchange rates [16][18] Question: How does the conversion rate of pre-backlog factor into future revenue? - Management noted that the pre-backlog of awarded studies is larger than the current backlog and is expected to improve backlog conversion in 2026 [22][39] Question: What is the competitive landscape like? - Management stated that while competition has increased, their win rate remains stable, and they do not see a significant deterioration in competitive position [49][50] Question: Can you provide more detail on the metabolic indexing? - Management confirmed that GLP-1 accounts for a significant portion of their metabolic work, but there are also other therapeutic areas contributing to growth [74][75]