Medpace Holdings, Inc. (MEDP): what the price assumes
In the published model solve dated 2026-Q2, anchored at $600.65, Medpace Holdings, Inc. (MEDP) is priced for +32.9% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.
Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/MEDP
Headline
| Field | Value |
|---|---|
| Ticker | MEDP |
| Company | Medpace Holdings, Inc. |
| Current price | $600.65/sh |
| Composition | Oncology 30% / Metabolic 29% / Other 16% / Central Nervous System 10% / Cardiology 9% / AVAI 5% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 6.7% |
| Operating margin today | 21.0% |
| Margin compression (value-band) | -14.3pp |
| Implied growth | 32.9% |
| Multiple paid | 28x operating income |
The operating-margin figure is value-band context at year 6: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 10.7% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | -0.04σ |
| cohort percentile (of 115 peers) | 67 |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 3.16x | 5 | expensive |
| Earnings | 2.21x | 5 | expensive |
| Relative | 1.16x | 5 | expensive |
| Growth | 0.57x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $1442.36 | 0.42x | yes | FCF base $0.8B, growth 25% (input: historical growth), terminal g 4.0%, WACC 9.1%, 7yr projection |
| DCF Exit Multiple | Growth | $1056.16 | 0.57x | yes | Exit EV/EBITDA: 25.2x / 27.2x / 29.2x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | $517.58 | 1.16x | yes | P/E 28x (static sector reference · 2026-04), scenarios: 22.6x / 28.0x / 33.4x (bear / base = reference held flat / bull), EV/EBITDA 20x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $190.37 | 3.16x | yes | BV/sh $15.54, ROE (TTM) 113.3%, ke 9.3% |
| Two-Stage Excess Return | Asset | $1639.91 | 0.37x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $1004.29 | 0.60x | yes | Rev $2.8B, growth 25% (input: historical growth; tapered), Terminal P/S: 4.9x / 6.0x / 7.2x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $462.89 | 1.30x | yes | EPS $17.04, growth 27% (input: historical EPS growth), PEG=1.26 (Fair) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $171.78 | 3.50x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.40B × (1−20%) / WACC 9.1% → EPV (no growth) |
| Residual Income | Asset | $323.02 | 1.86x | yes | BV $15.54 + 5yr PV of (ROE (TTM) 113.3% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $77.20 | 7.78x | yes | √(22.5 × EPS $17.04 × BVPS $15.54) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $443.51 | 1.35x | yes | EBITDA $0.61B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $279.83 | 2.15x | yes | FCF $706.7M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $271.62 | 2.21x | yes | SBC-adj FCF $0.69B (FCF $0.71B − SBC $0.02B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $549.82 | 1.09x | yes | EPS $17.04 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $75.86 | 7.92x | yes | BV $15.54 × (ROIC 44.6% / WACC 9.1%) |
| P/Sales Sector | Relative | $598.09 | 1.00x | yes | Revenue $2.78B × sector P/S 6.0x |
| PEG Fair Value | Relative | $639.00 | 0.94x | yes | EPS $17.04 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $184.22 | 3.26x | yes | EPS $17.04 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Clinical research services (consolidated) | operating | enterprise | 2.5B reported-currency | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net cash | $502.7m |
| Net debt / NOPAT (after-tax) | -1.08x (net cash) |
| Net debt / operating income (pre-tax) | -0.86x (net cash) |
| Share count CAGR (buyback) | -4.1% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
Medpace is a contract research organization that runs clinical trials for biotech and pharma. The business is debt-free and cash-generative, holding about $653 million of net cash and shrinking its share count roughly 5.5% a year through buybacks. Q1 2026 revenue grew 26.5% to $706.6 million and EPS of $4.28 beat the $3.92 estimate.
The market is focused on the order book, not the print. Net new business awards produced a book-to-bill of 0.88 (below the 1.0 line that keeps backlog growing), and cancellations sit at the upper end of normal, which is why the stock sold off hard despite the beat.
At the precompute price of about $460 the valuation is elevated: the inversion implies roughly 29% operating-profit growth, while the asset and earnings-power models say expensive and only the relative-multiple and growth-DCF frames reach the price.
Bull Case
Lead with the balance sheet, because it is what lets Medpace own its own destiny through a biotech funding cycle. The company carries zero gross debt and about $653 million of net cash, so it never has to raise capital at the wrong moment, never has interest expense eating margin, and can keep buying back stock when the price falls. That buyback is real: the share count has shrunk about 5.5% a year, which compounds per-share results on top of revenue growth. A debt-free CRO with a fortress cash position is built to wait out the demand swings that define its industry, and it can press its advantage by repurchasing shares precisely when nervous holders sell.
The operating results say the franchise is still winning work even in a cautious funding environment. Q1 2026 revenue grew 26.5% to $706.6 million, EPS of $4.28 beat the $3.92 estimate, and backlog rose 2.9% to $2.93 billion. The trailing operating margin near 21% and a first-year return on invested capital around 50% reflect a business that converts trial work into cash efficiently. Management raised full-year 2026 guidance to revenue of $2.755 to $2.855 billion (8.9% to 12.8% growth) with diluted EPS of $16.68 to $17.50, which is not the profile of a business in trouble.
The forward setup has a credible re-acceleration path. The 10-K describes how the order book works: "New business awards represent the value of anticipated future net revenue that has been recognized in backlog," recognized "upon the signing of a contract." Biotech funding inflected meaningfully in the second half of 2025, and with the well-established 12-to-15-month lag between improved funding and bookings, that points to accelerating awards through the back half of 2026. Jefferies upgraded the stock to Buy at a $560 target on exactly that inflection. The bull case is a debt-free, high-return CRO buying back its own shares into a funding upturn that has not yet shown up in the order book.
Bear Case
The structural truth a Medpace holder must face is that the multiple is pricing accelerating growth while the single most forward-looking metric is pointing the other way. The net book-to-bill ratio came in at 0.88 in the quarter, which means the company booked less new work than it burned through in revenue, the mechanical condition under which backlog growth stalls. Backlog rose just 2.9% year over year, a sharp deceleration from the 26.5% revenue growth, and management acknowledged cancellations at the upper end of what it considers normal. The 10-K is blunt about why that matters: contracts can be cancelled or not renewed, and "termination or non-renewal may result in lower resource utilization rates, including with respect to personnel who we are not able to place on another customer engagement," and "historically, cancellations and delays have negatively impacted our" results. A CRO is only as good as its forward bookings, and the bookings are softening.
The valuation leaves no room for that to be true. At the precompute price of about $460 (June 27, 2026) the inversion implies roughly 29% company-wide operating-profit growth, against a current margin near 21% and full-year guidance that calls for 9% to 13% revenue growth. The price is underwriting a growth rate well above what the company itself is guiding. Only the relative-multiple and the most aggressive growth-DCF frames reach the tape.
The market has already started repricing the gap. The stock fell roughly 24% in the session after the beat, exactly because investors looked past the headline to the 0.88 book-to-bill and the cancellation commentary. Analyst sentiment is a Hold on average for this reason. The bull thesis depends on the biotech-funding inflection converting to bookings on the historical lag, but that is a forecast, not a fact in the backlog yet. The bear conclusion is that a premium multiple built on 29% implied growth is fragile when the order book is signaling a slowdown, and a single weak bookings quarter is enough to break it.
Valuation
Medpace is valued as an elevated growth name: the price is justified by the relative-multiple and growth-DCF frames while the asset-based and earnings-power models say expensive. The growth-DCF frames are extreme (perpetual-growth DCF near $1,125, exit-multiple near $721), which is what happens when a high-margin, high-return business is projected forward, but the conservative frames sit far below the price (earnings power value $144, simple excess return $172, the FCF-yield frame $276), and the blended X-ray is near $599. Relative valuation lands near $476, close to the precompute price of about $460.
The inversion is the cleaner read. The precompute price sits at or slightly above the top of that band, which says the market is pricing the optimistic end of the plausible range. The sensitivity is moderate at about 5.4 points of implied growth per point of cost of capital. The reliability of the solve is rated ok.
The synthesis: Medpace is a genuinely high-quality, debt-free, high-return business, and on the most optimistic forward frames it can be made to look cheap. The whole valuation rests on the biotech-funding inflection converting to bookings on the historical 12-to-15-month lag. If it does, the growth frames are vindicated; if the 0.88 book-to-bill marks a sustained slowdown, the earnings-power frames near $144 to $276 are the more honest anchor and the downside is large.
Catalysts
Q1 2026 was a beat that the market hated. Revenue grew 26.5% to $706.6 million (ahead of the $697.6 million estimate) and EPS of $4.28 beat the $3.92 estimate, but net new business awards of $618.4 million produced a book-to-bill of just 0.88, and backlog rose only 2.9% to $2.93 billion. The stock fell roughly 24% on the report as investors focused on the soft bookings and elevated cancellations.
Management nonetheless raised full-year 2026 guidance to revenue of $2.755 to $2.855 billion (8.9% to 12.8% growth), GAAP net income of $487 million to $511 million, EBITDA of $605 million to $635 million, and diluted EPS of $16.68 to $17.50.
The key forward catalyst is the biotech-funding cycle. Funding inflected meaningfully in the second half of 2025, and with the historical 12-to-15-month lag between funding and bookings, that supports a potential re-acceleration in awards through the back half of 2026, the timing Jefferies cited in upgrading to Buy at a $560 target.
Analyst sentiment is mixed, a Hold on average across about 13 analysts with targets clustered from roughly $419 to $560. The watch items are the quarterly book-to-bill and cancellation rates (the leading indicators), the conversion of improved biotech funding into new awards, and continued buyback activity against the net-cash balance sheet. Each maps directly to whether the elevated implied growth converts or unwinds.
Peer Cohorts (Per Segment, With Filing Citations)
Clinical research services (consolidated) (reported)
- IQV (IQVIA HOLDINGS INC.)
- FY2025 10-K: …practices when sold separately with consideration of market conditions and other factors, including customer demographics and geographic location. Revenues for services engagements where the transfer of control occurs ratably over time are recognized on a straight-line basis over the term of the arrangement. Revenues…
- FY2025 10-K: …trials and social listening, behavioral design, personal and innovative eHealth multichannel interactions across multiple sites (e.g., the physician's office, hospital, pharmacy, home), that act as an extension of the Health Care Provider prescribed treatment course which can lead to improved adherence and better…
- ICLR (ICON plc)
- FY2025 20-F: 2) identify the performance obligation in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies the performance obligation(s), which have been applied to revenue recognized from…
- FY2025 20-F: …that support the clinical research project, the transaction price is determined by reference to the contract or change order value (total service revenue and pass-through/reimbursable expenses) adjusted to reflect a realizable contract value. An assessment of the realizable contract value is judgmental in nature. The…
- CRL (CHARLES RIVER LABORATORIES INTERNATIONAL, INC.)
- FY2025 10-K: DL™) offerings, where we provide vivarium space to our clients. Some research institutions prefer to retain certain elements of their research in-house, while outsourcing staffing and management, thus driving demand for our services. We believe that our expertise in early-stage drug research, and in particular…
- FY2025 10-K: …academic institutions, government agencies, and non-governmental organizations. We have stable, long-term relationships with many of our clients. During 2025, no single client accounted for more than 4% of our total revenue and no single client accounted for more than 8% of the revenue of any of our three business…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.