IQVIA Earnings: Large Trial Cancellation Spooks Investors, but Long-Term Outlook Remains Positive

IQVIA reported first-quarter results in line with our expectations. Total quarterly revenue of $3.7 billion represented 2.3% growth versus the prior year. Investors sent shares down nearly 5% on the news of a cancellation of a significant central nervous system program comprising about $250 million of IQVIA's backlog. As a result, the first-quarter book/bill ratio was 1.23 times, which is down from 1.31 times in the fourth quarter of 2023. Excluding this cancellation, IQVIA's book/bill ratio would have been over 1.3 times. We are not too concerned about this cancellation, as it appears to be an outlier compared with typical cancellations in the range of $15 million-$20 million. We maintain our fair value estimate of $250 per share. Shares are currently trading at an 11% discount to our fair value estimate.