IQVIA Holdings Inc.IQVNYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $361.26 per share(market-calibrated)

+107.3%

Upside to Fair Value

Current

$174.27

Pure Model

$381.11

Fair Value

$361.26

Bull Case

$499.76

Bear Case

$279.55

Market Reality Check

Model Terminal Growth

3.00%

Market-Implied Growth

0.50%

Calibrated Growth

2.13%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $381.11.

What's Driving This Ratingfor IQV

↓

CapEx normalizing toward maintenance

Historical CapEx is 3.88% of revenue (heavy investment phase). Model fades this to 3.50% by Year 10, freeing up ~$100M in annual FCF. This is the biggest driver of long-term cash flow improvement.

↑

Margin expansion modeled

Current EBIT margin is 13.36% — below the sector mature average of 20.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $4.6B (17.82% margin).

→

Moderate revenue growth

Analyst consensus projects 5.70% revenue growth, fading to 3.00% by Year 10. Revenue reaches $26.0B (vs $16.3B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $302.15/share (20.2x terminal FCF) while exit multiple gives $460.06/share (32.6x terminal FCF). The 24x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 3.00% growth is more conservative. The base case averages both methods.

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 250bps below the model's 3.00%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 73.60% indicates efficient cash generation. FCF reaches $4.8B by Year 10 (18.33% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.41

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)10.85%

Cost of Debt

Pre-tax Cost of Debt3.54%

Tax Rate15.62%

After-tax Cost of Debt2.99%

Equity Weight (E/V)64.94%

Debt Weight (D/V)35.06%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (64.94% × 10.85%) + (35.06% × 2.99%)

= 8.09%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$17.2B	$19.3B	$21.6B	$23.5B	$26.0B
EBIT	$2.3B	$2.6B	$2.9B	$3.7B	$4.6B
Tax	$360M	$404M	$450M	$579M	$725M
NOPAT	$1.9B	$2.2B	$2.4B	$3.1B	$3.9B
+ Depreciation	$1.2B	$1.4B	$1.5B	$1.7B	$1.8B
- Capex	$670M	$735M	$801M	$854M	$911M
- Δ NWC	$93M	$111M	$105M	$96M	$76M
Free Cash Flow	$2.4B	$2.7B	$3.1B	$3.8B	$4.8B
Discount Factor	0.925	0.792	0.678	0.580	0.459
Present Value	$2.2B	$2.1B	$2.1B	$2.2B	$2.2B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$4.8B

Terminal Growth Rate3.00%

WACC8.09%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$96.5B

PV of Terminal Value$44.3B

Exit Multiple Method

Year 10 EBITDA$6.5B

Exit Multiple (EV/EBITDA)24.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$155.7B

PV of Terminal Value$71.5B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$21.8B

PV of Terminal Value$44.3B

Enterprise Value$66.1B

(-) Net Debt$14.2B

Equity Value$51.9B

Shares Outstanding172M

Price per Share$302.15

Exit Multiple Method

PV of Projected FCFs$21.8B

PV of Terminal Value$71.5B

Enterprise Value$93.3B

(-) Net Debt$14.2B

Equity Value$79.1B

Shares Outstanding172M

Price per Share$460.06

Pure Model Fair Value

$381.11

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.00%	2.50%	3.00%	3.50%	4.00%
6.09%	$500.37	$528.10	$564.80	$615.65	$690.80
7.09%	$419.28	$435.30	$455.23	$480.71	$514.44
8.09%	$358.89	$369.01	$381.11	$395.84	$414.18
9.09%	$311.24	$318.02	$325.92	$335.23	$346.36
10.09%	$272.16	$276.92	$282.35	$288.60	$295.87

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$279.55

60.4% vs current

• -25% vs analyst consensus
• Terminal growth: 2.5%
• Beta: 1.76

Base Case

$381.11

118.7% vs current

• Analyst consensus
• Terminal growth: 3.0%
• Beta: 1.41

Bull Case

$499.76

186.8% vs current

• +25% vs analyst consensus
• Terminal growth: 3.5%
• Beta: 1.20

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Healthcare Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth5.70%

Year 3 Revenue Growth6.07%

Year 5 Revenue Growth5.12%

Year 7 Revenue Growth4.27%

Year 10 Revenue Growth3.00%

Terminal Growth Rate3.00%

Margin & Efficiency

Current EBIT Margin13.36%

Terminal EBIT Margin20.00%

Tax Rate15.62%

Historical Capex / Rev3.88%

Terminal Capex / Rev3.50%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 24x EV/EBITDA (Healthcare sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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