On Sep 25, we issued an updated research report on Syneos Health, Inc. SYNH. While the company is gaining on balanced segmental growth, a strict regulatory environment is a cause of worry. Syneos Health currently carries a Zacks Rank #3 (Hold).
This global biopharmaceutical solutions company has outperformed its industry in the past six months. The stock has gained 27.2% compared with the industry’s 10.2% rise. The stock has gained 48.1% compared with the sector’s 26.6% rise.
The company exited the second quarter of 2020 with better-than-expected numbers. It won 35 COVID-19 related projects through the second quarter and still has a substantial pipeline of additional COVID-related opportunities. The issuance of guidance instills optimism.
The company has been strengthening its unique end-to-end market position by consistently innovating and expanding its Syneos One product. Strong RFP flow, a diverse portfolio of clinical and commercial initiatives and sustained customer interest in Syneos Health’s integrated offerings inspire optimism. Strong solvency with moderately leveraged balance sheet looks encouraging.
Syneos Health, Inc. Price
Syneos Health, Inc. price | Syneos Health, Inc. Quote
In terms of COVID-19 related developments, according to Syneos Health, over 70% of its clinical businesses comprise essential therapeutic areas that are experiencing reduced impacts of coronavirus outbreak. For example, oncology, rare disease, orphan diseases, and other complex disease are the areas where patients have limited treatment options. Although Syneos Health expects the impact of the pandemic to continue for the full year, the company believes it to be temporary.
In the second quarter, the segment delivered robust net awards, growing nearly 11% from last year. However, the company also noted that about 10% of sites remain completely inaccessible. This has been addressed by the company via remote monitoring. Additionally, about 40% of sites now permit physical visits, which have been steadily increasing since late April.
On the flip side, in the second quarter, Syneos Health’s Clinical Solutions segment’s revenues were down 12.3% year over year on a reported basis (down 11.6% at constant exchange rate or CER). One of the reasons for this downside was the reduced physical site monitoring visits and out-of-scope work related to COVID-19.
Commercial Solutions revenues were down 16% year over year (adjusted revenues moved down 15.8% at CER) in the reported quarter. The decline was caused by the impact of COVID-19, including a decline in reimbursable expenses associated with reduced field team travel and lower investigator meeting expenses as well as Deployment Solutions project start-up delays.
Zacks Rank & Key Picks
Currently, Syneos Health carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are QIAGEN N.V. QGEN, Thermo Fisher Scientific Inc. TMO and Hologic, Inc. HOLX.
QIAGEN’s long-term earnings-growth rate is estimated at 22.3%. It currently sports a Zacks Rank #1. (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Thermo Fisher’s long-term earnings-growth rate is estimated at 15.5%. It currently carries a Zacks Rank #2 (Buy).
Hologic’s long-term earnings-growth rate is estimated at 16.4%. The company presently sports a Zacks Rank #1.
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