Medpace stock crumbled Tuesday on a "shocking bookings miss" and after the clinical research organization slashed its 2024 sales guidance by $25 million at the midpoint.
During the three months ended June 30, Medpace booked $551 million in new business, which was significantly below expectations for $622.9 million, according to FactSet. William Blair analyst Max Smock had an even greater forecast, for $647 million.
Smock referred to the bookings miss as both "shocking" and "alarming."
"Earlier this month, we highlighted what we viewed as a less favorable setup for Medpace heading into the print as part of our second-quarter earnings preview," he said in a report. "But the size of the bookings miss in the quarter is admittedly significantly worse than we ever imagined."
On today's stock market, Medpace stock took an 18.3% nosedive to 357.30.
Medpace Stock: Analysts Left 'Scratching Our Heads'
Medpace, a clinical research organization, helps organize the studies biopharma companies need to gain approval for new drugs. Biotech funding has rebounded year-to-date and Medpace's peers have given constructive commentary, Smock said.
"We are left scratching our heads with respect to what could have happened over the last few months to cause such a dramatic drop-off in bookings in the second quarter," he said.
Specifically, bookings fell 4.1% year over year. While the backlog of business climbed 13.7% to $2.92 billion, that also missed forecasts for $3.03 billion, according to FactSet.
Complicating matters, sales were sandwiched between analysts' estimates at $528.1 million, climbing 14.6% year over year. Analysts projected $523 million to $530.1 million. But earnings crushed Medpace stock analysts' call for $2.54 EPS. Medpace earned $2.75 a share, up 42.5%.
Smock has an outperform rating on Medpace stock, but said the report likely removes the possibility of revenue growth acceleration in 2025. To that point, Medpace cut its sales outlook by $25 million at the midpoint, and now projects about $2.13 billion to $2.18 billion. Analysts call for $2.17 billion.
But the company boosted its earnings outlook to $11.24 to $11.93 a share, up about 46 cents per share at the midpoint. That handily beat Medpace stock analysts' call for $11.27 a share.
Shares Crumbled At The Open
Medpace stock hit its lowest point since February.
Shares have a perfect Composite Rating of 99. This means Medpace shares rank in the top 1% of all stocks when it comes to technical and fundamental metrics. Shares also have top EPS and strong Relative Strength ratings of 99 and 94, respectively. These are measures of profitability and 12-month performance, according to IBD Digital.
Medpace stock also lands on the IBD 50 list of elite growth stocks.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
