What Happened?
Shares of clinical research company Medpace Holdings (NASDAQ: MEDP) fell 11.2% in the pre-market session after the company reported first-quarter 2025 earnings with high expectations heading into the quarter, dampening the otherwise decent results. A key concern was the 19% decline in net new bookings. Also, the drop in the book-to-bill ratio to 0.90x further suggested future bookings were slowing, which might explain why investors didn't cheer louder.
On a positive note, Medpace blew past analysts' organic revenue and EPS expectations, and it lifted its full-year revenue guidance. Zooming out, we think this quarter featured some important positives. However, the market seemed to be hoping for more.
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What The Market Is Telling Us
Medpace’s shares are quite volatile and have had 15 moves greater than 5% over the last year. But moves this big are rare even for Medpace and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock dropped 8.7% on the news that the company reported weak fourth-quarter 2024 results: Medpace's full-year revenue, EPS, and EBITDA guidance fell short of Wall Street's estimates. The weaker-than-expected outlook suggests slowing business momentum, as reflected in the declining book-to-bill ratio of 0.99x. On the other hand, the company exceeded analysts' EPS and EBITDA expectations this quarter. Overall, this quarter could have been better.
Medpace is down 17% since the beginning of the year, and at $277.92 per share, it is trading 39.2% below its 52-week high of $457.29 from July 2024. Investors who bought $1,000 worth of Medpace’s shares 5 years ago would now be looking at an investment worth $3,360.
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