Medpace Holdings Inc. (MEDP) shares plummeted 13.24% in pre-market trading on Tuesday, following the release of its first-quarter 2025 financial results. Despite beating analyst expectations for Q1, the clinical research company's conservative full-year guidance and signs of slowing business momentum have sparked significant investor concerns.
The company reported impressive Q1 numbers, with revenue of $558.6 million surpassing analyst estimates of $527.2 million, and earnings per share (EPS) of $3.67 significantly beating the expected $3.06. However, Medpace's full-year 2025 outlook fell short of market expectations, projecting EPS between $12.26 and $13.04 and revenue between $2.14 billion and $2.24 billion, representing a modest growth of only 1.5% to 6.2% over 2024.
Adding to investor worries, Medpace reported a decrease in net new business awards, down 18.8% to $500.0 million, and a lower book-to-bill ratio of 0.90x. These factors suggest potential challenges in maintaining the company's growth trajectory, despite the strong quarterly performance. As a result, the market appears to be reevaluating Medpace's near-term prospects, leading to the significant pre-market sell-off. In response to the earnings report, Deutsche Bank has cut its target price for Medpace from $325 to $280, maintaining a Hold rating on the stock.
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