What Happened?
Shares of clinical research company Medpace Holdings (NASDAQ: MEDP) jumped 49.3% in the morning session after the company reported strong second-quarter financial results and raised its full-year guidance.
The company announced its second-quarter results, revealing revenue of $603.3 million, a 14.2% increase from the prior-year period. Earnings per share also grew, coming in at $3.10. Following the strong performance, Medpace raised its full-year 2025 revenue forecast to a range of $2.42 billion to $2.52 billion. It also increased its earnings per share guidance for the year to a range of $13.76 to $14.53. This positive outlook, which surpassed previous forecasts, appeared to fuel significant investor optimism. Medpace, which provides services for all phases of clinical drug development, was scheduled to host a conference call to discuss the results.
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What Is The Market Telling Us
Medpace’s shares are quite volatile and have had 17 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 3 months ago when the stock dropped 11.2% on the news that 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.
Medpace is up 42.1% since the beginning of the year, and at $475.57 per share, has set a new 52-week high. Investors who bought $1,000 worth of Medpace’s shares 5 years ago would now be looking at an investment worth $4,315.
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