Analyst Note| Rachel Elfman |
Narrow-moat PRA Health Sciences reported first-quarter revenue of $933 million, representing 19% growth from the prior-year period. Adjusted EBITDA was nearly $136 million for the quarter, up over 21% year over year. We maintain our fair value estimate of $166 per share, which is Icon's takeover price per its announced acquisition agreement of PRA. The deal is expected to close in the third quarter of 2021. However, based on our DCF model, we continue to view shares as overvalued as the stock is currently trading at a 90% premium to our stand-alone fair value estimate of $88. PRA's shares have increased considerably, about 30%, since the acquisition was announced at the end of February.