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Let's talk about the popular IQVIA Holdings Inc. (NYSE:IQV). The company's shares saw a significant share price rise of over 20% in the past couple of months on the NYSE. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine IQVIA Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for IQVIA Holdings
Is IQVIA Holdings still cheap?
According to my valuation model, IQVIA Holdings seems to be fairly priced at around 18% below my intrinsic value, which means if you buy IQVIA Holdings today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $302.10, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that IQVIA Holdings’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from IQVIA Holdings?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to more than double over the next couple of years, the future seems bright for IQVIA Holdings. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? IQV’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on IQV, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.