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Medpace Holdings (MEDP)
NASDAQ:MEDP
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Medpace Holdings
(NASDAQ:MEDP)
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Rating:76Outperform
Price Target:
$599.00
▲(30.94% Upside)
Action:ReiteratedDate:02/11/26
The score is driven primarily by strong financial performance (steady multi-year growth, high profitability, modest leverage, and excellent free cash flow) and supportive 2026 guidance/backlog visibility from the earnings call. These positives are tempered by weak technical momentum (below key moving averages with negative MACD) and a premium valuation (P/E ~37) that raises execution risk.
Positive Factors
Revenue Growth
Medpace's strong revenue growth indicates robust demand for its services, enhancing its market position and supporting long-term financial stability.
Net New Business Awards
The significant increase in new business awards suggests a strong pipeline and future revenue potential, reinforcing Medpace's competitive edge.
Cash Flow Management
Efficient cash flow generation supports Medpace's ability to invest in growth opportunities and maintain financial flexibility.
Negative Factors
Higher Effective Tax Rate
A higher effective tax rate can reduce net income, impacting profitability and potentially limiting reinvestment in business expansion.
Lower EBITDA Margin
A slight decline in EBITDA margin may indicate rising costs or pricing pressures, which could affect future profitability if not addressed.
Cancellations Impact
Cancellations can disrupt revenue streams and operational planning, posing risks to Medpace's growth trajectory and client relationships.
Medpace Holdings (MEDP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.98B
Dividend YieldN/A
Average Volume (3M)384.73K
Price to Earnings (P/E)29.9
Beta (1Y)1.25
Revenue Growth13.88%
EPS Growth23.92%
CountryUS
Employees5,900
SectorHealthcare
Sector Strength45
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)4.67
Shares Outstanding28,381,283
10 Day Avg. Volume364,830
30 Day Avg. Volume384,731
Financial Highlights & Ratios
PEG Ratio1.82
Price to Book (P/B)35.29
Price to Sales (P/S)6.40
P/FCF Ratio23.76
Enterprise Value/Market Cap1.00
Enterprise Value/Revenue5.12
Enterprise Value/Gross Profit17.04
Enterprise Value/Ebitda23.49
Forecast
1Y Price Target
$521.38Price Target Upside13.97% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)17.12
Revenue Forecast (FY)$2.81B
Medpace Holdings Business Overview & Revenue Model
Company DescriptionMedpace Holdings, Inc. provides clinical research-based drug and medical device development services in North America, Europe, and Asia. It offers a suite of services supporting the clinical development process from Phase I to Phase IV in various therapeutic areas. The company also provides clinical development services to the pharmaceutical, biotechnology, and medical device industries; and development plan design, coordinated central laboratory, project management, regulatory affairs, clinical monitoring, data management and analysis, pharmacovigilance new drug application submissions, and post-marketing clinical support services. In addition, it offers bio-analytical laboratory services, clinical human pharmacology, imaging services, and electrocardiography reading support for clinical trials. The company was founded in 1992 and is based in Cincinnati, Ohio.
How the Company Makes MoneyMedpace generates revenue primarily through its contract research services provided to pharmaceutical and biotechnology companies. The company operates on a fee-for-service model, charging clients for the clinical trial services they require, which can include study design, patient recruitment, data management, and regulatory compliance. Key revenue streams include clinical trial management fees, laboratory service fees, and strategic consulting services. Medpace also benefits from long-term contracts with clients, which provide a stable revenue base. Significant partnerships with major pharmaceutical companies enhance its credibility and expand its market reach, and its focus on therapeutic areas with high unmet medical needs can lead to increased demand for its services, contributing to its overall earnings.
Medpace Holdings Key Performance Indicators (KPIs)
Medpace Holdings Earnings Call Summary
Earnings Call Date:Feb 09, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 27, 2026
Earnings Call Sentiment Positive
The call presented multiple clear strengths: robust revenue and EBITDA growth in Q4 and full year 2025, strong cash generation, aggressive share repurchases, a healthy backlog, and positive 2026 guidance. Key near-term challenges include a spike in cancellations (notably in metabolic programs), modest margin compression due to higher reimbursable costs, and elevated pass-through exposure that may moderate reported top-line cadence early in 2026. Management expects hiring above 2025 levels but plans to rely on improved retention and productivity to support margins, and guidance assumes normalized cancellation rates. On balance, the company's fundamental growth, cash flow, and shareholder return actions outweigh the transient operational headwinds discussed on the call.Q4-2025 Updates
Positive Updates
Strong Revenue Growth (Q4 and Full Year 2025)
Q4 2025 revenue of $708.5M, up 32% year-over-year; full year 2025 revenue of $2.53B, up 20% versus 2024.
Robust Net New Business and Backlog
Q4 net new business awards increased 39.1% YoY to $736.6M, producing a net book-to-bill of 1.04. Ending backlog was approx. $3.0B, up 4.3% year-over-year, with ~$1.9B expected to convert to revenue in the next 12 months and a Q4 backlog conversion rate of 23.6%.
Profitability Expansion in Absolute Dollars
Q4 EBITDA of $160.2M, up 20% YoY (from $133.5M); full year EBITDA $557.7M, up 16.1% YoY. Q4 net income $135.1M (up 15.5% YoY) and full year net income $451.1M (up 11.6% YoY).
Improving EPS and Shareholder Returns
Q4 diluted EPS $4.67 vs $3.67 prior year; full year diluted EPS $15.28 vs $12.63 in 2024. Repurchased 2.96M shares in 2025 for $912.9M with $821.7M remaining under authorization.
Strong Cash Generation and Working Capital
Generated $192.7M in cash from operating activities in Q4; cash balance of $497M as of Dec 31, 2025; net DSO was negative 58.7 days (indicating favorable working capital).
2026 Guidance Indicates Continued Growth
2026 revenue guidance $2.755B–$2.855B (growth of 8.9%–12.8% vs 2025); 2026 EBITDA guidance $605M–$635M (+8.5%–13.9%); 2026 net income $487M–$511M and EPS $16.68–$17.50 (no share repurchases assumed in guidance).
Operational Plans for Controlled Headcount Growth and Productivity
Company expects hiring in 2026 above 2025 levels (mid- to high-single-digit growth) but still below revenue growth rate due to improved retention and productivity gains, supporting margin resiliency.
Negative Updates
Elevated Cancellations in Q4
Backlog cancellations in absolute and percentage terms were the highest in over a year, producing a lower-than-anticipated net book-to-bill of 1.04 and a noticeable Q4 spike in cancellations (widespread rather than concentrated in one client).
Margin Compression (Q4 and Full Year)
Q4 EBITDA margin declined to 22.6% from 24.9% prior-year; full year EBITDA margin decreased to 22.0% from 22.8% the prior year, primarily impacted by higher reimbursable cost activity driven by therapeutic mix.
Higher Reimbursable/Pass-Through Cost Exposure
Pass-through/reimbursable costs were elevated (driven largely by metabolic trials); company expects reimbursables to be ~41%–42% of revenue in 2026 and to be higher at the start of 2026 than at year-end 2025, which can moderate reported top-line growth and pressure margins.
Cancellations Skewed to Metabolic Therapeutic Area
Q4 cancellations were somewhat skewed toward metabolic programs (obesity/diabetes and NASH), with some studies ending early due to compound performance, introducing short-term volatility and concentration risk in that segment.
Net Income Growth Lags EBITDA Growth
Net income growth (Q4 +15.5%, full year +11.6%) trailed EBITDA growth due to lower interest income versus prior year and a slightly higher effective tax rate.
Guidance Assumptions and External Risks
2026 guidance assumes normal cancellation rates and no further share repurchases; risks noted include potential continued elevated reimbursable mix early in the year and uncertainty around the pace and benefits of AI-driven productivity improvements.
Company Guidance
For 2026 Medpace provided full‑year guidance calling for total revenue of $2.755 billion to $2.855 billion (growth of 8.9%–12.8% versus 2025’s $2.53 billion), EBITDA of $605 million to $635 million (up 8.5%–13.9% from 2025 EBITDA of $557.7 million), and net income of $487 million to $511 million, with diluted EPS of $16.68 to $17.50 (versus $15.28 in 2025). The outlook assumes a full‑year effective tax rate of 18.5%–19.5%, interest income of $24.3 million, 29.2 million diluted weighted average shares outstanding, no share repurchases included, and foreign exchange rates as of December 31, 2025; reimbursable costs are expected to be ~41%–42% of revenue (starting the year higher than they finish), management projects roughly $1.9 billion of backlog will convert to revenue over the next 12 months (ending backlog was ~$3.0 billion) and said the guidance midpoint reflects normal cancellation rates and anticipated mid‑to‑high single‑digit headcount growth.Medpace Holdings Financial Statement Overview
Summary
Strong, consistent revenue expansion through 2025, solid profitability (generally stable gross margin and high net margin), modest leverage, and excellent free-cash-flow generation with strong cash conversion. Key offsets are moderating growth vs. prior years, some 2025 margin softening, and a sharp equity decline that muddies ROE interpretation.Income Statement
Revenue has scaled consistently from $0.93B (2020) to $2.53B (2025), with growth strong through 2021–2023 and moderating more recently (2024–2025). Profitability is solid for the group: gross margin is generally stable around ~28%–31% and net margin remains high (~15%–19%), though 2025 shows some net margin compression versus 2024. Operating profitability remains healthy overall, but the 2025 operating margin line item appears inconsistent (reported as 0.0), which limits full comparability for that year.86
Very Positive
Balance Sheet
Leverage is modest with low debt relative to equity (debt-to-equity ~0.14–0.49 across the period and ~0.25 in 2025), supporting financial flexibility. Equity levels, however, have been volatile—most notably declining from 2024 to 2025—which can reduce balance-sheet cushioning even as debt stays controlled. Returns on equity are extremely high in 2024–2025 (helped by the lower equity base), which is a strength but also signals the metric may be amplified by equity changes rather than purely improving business economics.80
Positive
Cash Flow
Cash generation is a clear strength: operating cash flow and free cash flow rise materially over time, reaching ~$713M in 2025. Free cash flow closely tracks (and in 2025 matches) reported earnings, indicating strong cash conversion and limited leakage from working capital/capital spending. One watch-out is that cash flow relative to operating profit is only moderate (coverage roughly ~0.47–0.59), suggesting some working-capital variability even with strong overall cash production.91
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.53B | 2.11B | 1.89B | 1.46B | 1.14B |
| Gross Profit | 760.62M | 656.30M | 524.50M | 432.44M | 328.15M |
| EBITDA | 570.50M | 476.12M | 363.15M | 301.04M | 219.73M |
| Net Income | 451.12M | 404.39M | 282.81M | 245.37M | 181.85M |
Balance Sheet | |||||
| Total Assets | 1.98B | 2.10B | 1.66B | 1.35B | 1.66B |
| Cash, Cash Equivalents and Short-Term Investments | 497.05M | 669.44M | 245.45M | 28.27M | 461.30M |
| Total Debt | 250.50M | 149.52M | 142.12M | 188.87M | 130.97M |
| Total Liabilities | 1.52B | 1.28B | 1.10B | 966.11M | 707.01M |
| Stockholders Equity | 459.07M | 825.54M | 558.95M | 386.39M | 952.93M |
Cash Flow | |||||
| Free Cash Flow | 681.87M | 572.27M | 396.73M | 351.17M | 235.06M |
| Operating Cash Flow | 713.22M | 608.82M | 433.37M | 388.05M | 263.33M |
| Investing Cash Flow | -31.14M | -28.31M | -34.63M | -38.74M | -31.36M |
| Financing Cash Flow | -860.39M | -154.01M | -182.64M | -775.77M | -44.45M |
Medpace Holdings Technical Analysis
Negative
457.47
Price Trends
543.84
Negative
557.11
Negative
477.32
Negative
Market Momentum
-31.84
Negative
37.08
Neutral
84.72
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MEDP, the sentiment is Negative. The current price of 457.47 is below the 20-day moving average (MA) of 475.10, below the 50-day MA of 543.84, and below the 200-day MA of 477.32, indicating a bearish trend. The MACD of -31.84 indicates Negative momentum. The RSI at 37.08 is Neutral, neither overbought nor oversold. The STOCH value of 84.72 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MEDP.
Medpace Holdings Risk Analysis
Medpace Holdings disclosed 37 risk factors in its most recent earnings report. Medpace Holdings reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Medpace Holdings Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $12.98B | 29.91 | 70.23% | ― | 13.88% | 23.92% | |
70 Outperform | $8.27B | 14.64 | 6.27% | ― | -2.46% | -17.89% | |
70 Outperform | $50.70B | 48.68 | 66.20% | ― | 8.39% | 21.44% | |
64 Neutral | $10.69B | 47.36 | 3.22% | 0.29% | 3.37% | -18.80% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
51 Neutral | $8.79B | -60.42 | -4.36% | ― | -0.92% | -118.96% |
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.