Shaping Medical Research
Great results Medpace (+25%)
The best stock within our Portfolio?
Medpace.
The stock is up more than 60% since we first bought it in October last year and increased by more than 25% (!) over the past 5 days.
This week, Medpace published great results.
Let’s explain you everything you need to know.
Medpace
Medpace is a Clinical Research Organization that executes (pre)clinical tests for biotechnology companies.
It’s important to highlight that Medpace itself is not a biotechnology company. They help biotechnology companies execute their clinical tests, providing them with robust cash flows.
2023 Results
Medpace published great results for the full year 2023. This is something we love to see.
Here are some key takeaways:
Revenue: $1,885.8 million (+29.2%)
EBITDA: $362.5 million (+17.7%)
Net new business awards: $2,356.7 million
Book-to-bill ratio: 1.25x
GAAP net income: $282.8 million (+15.2%)
Net Income margin: 15.0% (versus 16.8% the year before)
Other key takeaways:
2024 Guidance
Revenue: $2.15-$2.2 billion (growth of +14% to +16.7%)
EBITDA: $400 million - $430 million
GAAP net income: $326 million - $348 million
Diluted GAAP EPS: $10.18-$10.87
August Troendle expects the company’s growth to accelerate again after 2024 (he sees a growth rate of 15% as a ‘bottom’)
Growing faster than peers
Medpace keeps growing at a rate that is significantly higher than its peers, and management expects they will continue to do so
This is great as the end market is expected to grow by 11.5% per year until 2030
Share repurchases
In 2023, Medpace repurchased 781,068 shares for $144.0 million (no share repurchases in the fourth quarter of 2023)
At the end of 2023, Medpace had $308.8 million remaining under its authorized share repurchase program
Update investment case
We bought Medpace in October for $240.9 per share.
Today, the stock price is equal to $394.
This means the stock is up 60% since we first bought it.
Is the stock still interesting today? Let’s update our investment case and find out.