Syneos Health, Inc. ( NASDAQ: SYNH ) lost ~23% pre-market Friday after the contract research organization missed Street forecasts with its Q3 2022 results and lowered the outlook to a level below the consensus estimates.
“We are disappointed in our third quarter results, as we experienced more significant headwinds in net awards, revenue and margins in the quarter than we had anticipated,” Chief Executive Michelle Keefe remarked.
Falling ~1% YoY to $1.3B, revenue for the period fell short of the company’s forecasts as the Clinical Solutions, and Commercial Solutions segments added $182.2M and $276.3M worth of net new business awards, with 0.18x and 0.83x of Book-to-Bill ratios, respectively.
Noting the ongoing impact of factors such as lower net new business awards, delays in backlog conversion, and forex headwinds, the company has lowered its full-year revenue guidance to $5.30B –$5.36B compared to $5.47B in the consensus.
Syneos ( SYNH ) has also slashed its earnings outlook to $4.69 – $4.87 of adjusted diluted EPS, lower than the $4.98 in the consensus.
Commenting on the results, Evercore ISI analyst Elizabeth Anderson with an Outperform rating on the stock, wrote: “Despite the YTD pullback in shares, we would expect the stock to be down significantly today as these results are likely worse vs. the already-lowered expectations.”
She argues that “most concerning” was the decline in clinical net new business awards, which “seems to have deteriorated since the company provided an update in early September.”
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Syneos Health sheds 23% as outlook stands below consensus