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Is a Beat in Store for IQVIA Holdings (IQV) in Q4 Earnings?

Zacks Equity Research

IQVIA Holdings Inc. IQV is scheduled to report fourth-quarter 2018 results on Feb 14, before the opening bell.

Strength across segments, operating performance and tax efficiencies are likely to boost IQVIA Holdings’ results.

Over the past year, shares of IQVIA Holdings have gained 29%, significantly outperforming the 7.8% rise of the industry it belongs to and 1.9% gain of the Zacks S&P 500 composite.

Let’s see how things are shaping up for the announcement.

Strength Across Segments to Drive the Top Line

The Zacks Consensus Estimate for fourth-quarter 2018 revenues is pegged at $2.62 billion, indicating year-over-year growth of 21.1%. The upside is likely to be driven by strength across the company’s Research & Development Solutions (R&DS) and Technology & Analytics Solutions (TAS) segments. In third-quarter 2018, total revenues of $2.59 billion increased 5.2% year over year.

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Segment wise, TAS should benefit from strength across real-world and analytical services and incremental revenues from acquisitions. Strategic collaborations such as the agreement with Roche, Genomics England and a technology deal with Theramex should help the company strengthen its technological solutions. Launch of a Software as a Service (“SaaS”) eConsent tool for use in clinical trials and development of SaaS safety platform are the other major positives.

R&DS segment is expected to benefit from volume-related increases in clinical services and lab testing volumes. Substantial organic growth is likely to be witnessed in the segment.

IQVIA Holdings Inc. Revenue (TTM)

IQVIA Holdings Inc. Revenue (TTM) | IQVIA Holdings Inc. Quote

Bottom-Line Expectations

The Zacks Consensus Estimate for earnings per share (EPS) in the to-be-reported quarter is pegged at $1.47, indicating year-over-year growth of 5%. Tax efficiencies and solid operational performance are likely to boost the company’s bottom line.

In third-quarter 2018, adjusted earnings per share of $1.42 increased 19.3% year over year.

Our Model Suggests a Beat

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

IQVIA Holdings has an Earnings ESP of +0.37% and a Zacks Rank #3, a combination that increases the odds of an earnings beat.

IQVIA Holdings Inc. Price and EPS Surprise

IQVIA Holdings Inc. Price and EPS Surprise | IQVIA Holdings Inc. Quote

Other Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat on earnings:

Copart CPRT has an Earnings ESP of +1.63% and a Zacks Rank #2. The company is expected to report second-quarter fiscal 2019 results on Feb 25. You can see the complete list of today’s Zacks #1 Rank stocks here.

Conduent Incorporated CNDT has an Earnings ESP of +0.95% and a Zacks Rank #3. The company is slated to release fourth-quarter 2018 results on Feb 20.

ICF International ICFI has an Earnings ESP of +0.41% and a Zacks Rank #3. The company is scheduled to report fourth-quarter 2018 results on Feb 26.

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Zacks Investment Research