Does Healthcare Stock IQVIA Holdings Belong in Your Portfolio?

With more than 800 million non-identified patient records, IQVIA Holdings, Inc. (IQV) is one of the world’s top companies that provides integrated information and technology-enabled healthcare services. The COVID-19 pandemic has accelerated the digitalization of the healthcare space, which is benefitting IQV. Its stock has gained 33.7%  over the past nine months.

The stock closed yesterday’s trading session at $191.05 and is currently trading 4.5% below its 52-week high of $199.99.

With the increasing use of advanced analytics and artificial intelligence (AI) in the healthcare space, we think IQV could see a huge demand for its offerings in the coming months.

Let’s take a closer look at the factors that could influence IQV’s performance in the near term:

Increasing Use of AI in Healthcare Space

The use of healthcare analytics and AI in the healthcare space are expected to be quite beneficial for a number of reasons. Among those reasons are  the use of conversational AI, which could help identify those suffering from or at risk of chronic disease. IQV is said to be at the “intersection of data science and healthcare.” So, powered by the IQVIA CORE, the company’s AI and Machine Learning capabilities and domain expertise are expected to help deliver better solutions to meet growing market demands.

Increasing Demand for IQV’s OCE Platform

IQV’s Orchestrated Customer Engagement (OCE) solution has been selected by 140 life science companies in nearly 90 countries. Last month, Rhone-Alpes-based Laboratoires Théa has selected the company’s OCE platform and the OneKey HCP/HCO reference database for deployment across more than 22 markets. Last November, IQV’s OCE was selected by Zentiva, a leading player in branded generic and OTC medications in the European and CIS markets, to address changes in the market and streamline its r commercial operations while creating more impactful customer interactions.

Impressive Recent Financials

IQV’s  fiscal 2020 fourth quarter (ended December 31, 2020) revenue increased 13.9% year-over-year to $3.298 billion. Its adjusted EBITDA was reported to be $735 million for the fourth quarter, up 14.5% year-over-year. Also, its adjusted EPS increased 21.3% year-over-year to $2.11. IQV has surpassed the consensus EPS estimates in each of the trailing four quarters.

Favorable Analyst Estimates

Analysts expect IQV’s revenue to increase 15% for the quarter ending March 31, 2021, 28.5% for the quarter ending June 30, 2021 and 12.7% in fiscal 2021. The company’s EPS is expected to grow 24.3% for fiscal 2021, 15.5% for fiscal 2022 and at a rate of 15.9% per annum over the next five years.

Wall Street analysts expect the stock to hit  $200 in the near term, which indicates a potential upside of 5.2%.

POWR Ratings Indicate Solid Prospects

IQV has an overall rating of B,  which equates to Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight different categories. Among  these categories, IQV has a grade of A for Growth. This is consistent with analyst expectations that revenue and EPS will increase.

Moreover, IQV has a B grade  for Momentum, in sync with the stock’s 21.3% gains over the past six months and more than 12% gains over the past three months.

The stock is also graded for Value, Stability, Sentiment and Quality. Click here to get all IQV’s ratings.

IQV is ranked #18 of 60 stocks in the Medical - Diagnostics/Research industry.

Click here to access 17 other top-rated stocks in the same industry.

Bottom Line

IQV is strategically positioned to gain from the increasing use of data analytics and AI in the healthcare space. We think the stock should continue advancing based on its strong financials and increasing demand for its services such as its  OCE platform.

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IQV shares were trading at $194.81 per share on Wednesday afternoon, up $3.76 (+1.97%). Year-to-date, IQV has gained 8.73%, versus a 4.64% rise in the benchmark S&P 500 index during the same period.

Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst.

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