Medpace Earnings: Strong Outsourcing Demand Drives Sales; Raising Fair Value Estimate 13%

Narrow-moat Medpace delivered a strong first-quarter performance, highlighted by revenue of $511 million, a year-over-year increase of nearly 18%. We have raised our fair value estimate to $296 per share from $261 based on continued robust demand for Medpace’s clinical trial services. While we have a very positive outlook and strong growth projections for Medpace, we currently view the shares as overvalued, trading at a 37% premium to our fair value estimate. Investors reacted positively to Medpace’s strong results, and year to date, the shares have risen 33% thanks to the firm’s solid performance despite potential concerns related to the biotech funding environment and macroeconomic challenges affecting its small to midsize biopharma customers.