IQVIA's Sky-High P/E Ratio Reflects Big Growth Potential But Also Significant Risks
• IQVIA Holdings' P/E ratio of 37.5x signals potentially overvalued shares, given most US companies have much lower P/E ratios
• However, IQVIA's earnings have grown substantially over the past 3 years, up 566% in total, justifying a higher P/E to some extent
• Analysts forecast strong future earnings growth of 20% per year over the next 3 years for IQVIA, well above broader market growth forecasts
• IQVIA's high P/E ratio seems to reflect confidence in the company's superior future earnings growth potential
• Risks include high debt levels and shares possibly trading 21% above fair value currently