Don’t Chase Medpace Stock Here Despite Its Strong Technical Momentum

• Medpace (MEDP) demonstrates strong technical momentum, maintaining a 100% “Buy” technical opinion from Barchart.
• Shares are up more than 20% over the past year.
• Valuation remains a concern, with a trailing P/E of 36.35x.
• I maintain a “Hold” stance, recommending existing holders use a stop loss due to high volatility and divergent analyst targets.

Today’s Featured Stock

Valued at $17.2 billion, Medpace (MEDP) is a scientifically driven, global, full-service clinical contract research organization which provides Phase I-IV clinical development services to the biotechnology, pharmaceutical, and medical device industries.  

What I’m Watching

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals and superior current momentum. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. MEDP checks those boxes. The Trend Seeker issued a new “Buy” signal on Sept. 15. Since that signal, shares are up 0.95%.

Barchart’s Technical Indicators for Medpace

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

Medpace hit an all-time high of $677.90 on July 23.

• Medpace has a Weighted Alpha of 29.69.
• MEDP has a 100% “Buy” opinion from Barchart.
• The stock has gained 21.64% over the past 52 weeks.
• Medpace has its Trend Seeker “Buy” signal intact.
• The stock recently traded at $626.10 with a 50-day moving average of $605.68.
• MEDP had 5 highs and gained 0.83% in the last month.
• 60-month beta of 1.18
• Relative Strength Index (RSI) is at 57.65.
• There’s a technical support level around $604.63.

Don’t Forget the Fundamentals

• $17.2 billion market capitalization.
• 35.75x trailing price-earnings ratio.
• Revenue is expected to grow 12.72% this year and another 6.33% next year.
• Earnings are estimated to increase by 15.94% this year and an additional 9.03% next year.

Analyst and Investor Sentiment on Medpace

• Wall Street analysts followed by Barchart give the stock 1 “Strong Buy,” 1 “Moderate Buy,” and 12 “Hold” opinions with price targets from $492 to $700.
• Value Line rates the stock “Above Average” with price targets from $500 to $750 with a consensus price target of $736..
• Morningstar thinks the stock is 64% overvalued with a fair value of $370.
• CFRA’s MarketScope rates the stock as “Buy.”
• 8,490 investors are following the stock on Seeking Alpha, which rates it as a “Hold.”
• TipRanks’ analysts have a consensus of $612.10, which is close to yesterday’s close.
• Short interest is 5.99% of the float with 8.22 days to cover the float.

The Bottom Line on Medpace

Analysts have widely differing views on the price target for this stock. Although MEDP displays exceptional profitability and solid growth performance, its high valuation tempers the outlook. This may not be a great entry point for this stock, but if you already hold it, I’d continue to hold with a stop loss in place. 

Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio, it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.

On the date of publication, Jim Van Meerten had a position in: MEDP . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.