PRA Health Sciences (PRAH) Hits 52-Week High on Solid Q2

Share price of PRA Health Sciences PRAH rallied to a new 52-week high of $52.72 on Aug 23, eventually closing a tad bit higher at $52.59. This represents an impressive one-year return of approximately 42%, better than the S&P 500’s 17.1% over the same period.

Currently, PRA Health Sciences holds a Zacks Rank #3 (Hold). Notably, the stock has a market cap of $3.15 billion.

Catalysts

PRA Health Sciences reported an impressive second quarter of 2016 with revenues totaling $456 million, a 16% increase over the prior-year quarter and above the Zacks Consensus Estimate of $382 million.

Notably, adjusted earnings of 61 cents per share beat the Zacks Consensus Estimate by 3 cents and were up 41.8% on a year-over-year basis.

Service revenues at PRA Health Sciences were the key driver of the stellar second-quarter performance, as it represented growth of 17.2% on a year-over-year basis, totaling $394.2 million (actual foreign rates). However, at constant currency, it surged 17.3%.

The company is also striving to effectively manage overhead functions and cut down expenses. Notably, backlog increased approximately 4% year over year in the reported quarter to approximately $2.6 billion. PRA Health Sciences posted adjusted EBITDA of $73.3 million in the second quarter, up 19.6% on a year-over-year basis.

Estimate Revisions

The Zacks Consensus Estimate for fiscal 2016 increased by a couple of cents to $2.40 over the last 30 days. Similarly, for fiscal 2017, estimates have scaled 4 cents to $2.78 over the same time frame.

Key Sector Picks

Better-ranked stocks in the broader medical sector include CryoLife Inc. CRY, Masimo Corporation MASI and NuVasive Inc. NUVA. Notably, all the three stocks sport a Zacks Rank #1 (Strong Buy).

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