Understanding Syneos Health’s Newly Added Risk Factor

Syneos Health (SYNH) is an American multinational company that helps biopharmaceutical companies with drug development processes. Its Clinical Solutions unit offers services such as patient recruitment and study startup. The Commercial Solutions unit provides consulting, medication adherence, and communications services.

Syneos’ earnings report shows Clinical Solutions revenue rose 23.9% year-over-year to $1.04 billion in Q3 2021. Commercial Solutions revenue increased 18.7% year-over-year to $310.8 million. The company reported total revenue of $1.35 billion versus $1.1 billion in the same quarter last year and exceeded the consensus estimate of $1.34 billion. It posted adjusted EPS of $1.22, which rose from $1.04 in the same quarter last year and beat the consensus estimate of $1.17.

For full-year 2021, the company anticipates revenue in the band of $5.2 billion to $5.28 billion and adjusted EPS in the range of $4.35 – $4.49. Syneos ended Q3 with $122.5 million in cash.

Syneos has recently made several acquisitions to bolster its business. It has acquired StudyKIK, a company whose technology supports patient recruitment and retention for clinical trials. It has also recently acquired RxDataScience, a company that helps with the analysis and management of healthcare information.

With this in mind, we used TipRanks to take a look at the risk factors for Syneos Health.

Risk Factors 

According to the new TipRanks Risk Factors tool, Syneos’ main risk category is Finance and Corporate, representing 40% of the total 52 risks identified for the stock. Legal and Regulatory and Ability to Sell are the next two major risk categories at 16% and 13% of total risks, respectively.

In a newly added Finance and Corporate risk factor, Syneos informs investors that it ended Q3 with $182.5 million remaining under its $300 million stock repurchase program that took effect in January 2021. The repurchase program is expected to run through December 2022. It mentions that the program is mostly funded with cash from operations, working capital, and debt. It goes on to caution that the program may be changed or stopped at any time.

The Finance and Corporate risk factor’s sector average is 40%, similar to that of Syneos. Since the beginning of 2021, Syneos stock has gained about 50%.

Analysts’ Take

Robert W. Baird analyst Eric Coldwell recently reiterated a Buy rating on Syneos stock with a price target of $122, which suggests 19.19% upside potential.

Consensus among analysts is a Strong Buy based on 8 Buys and 1 Hold. The average Syneos Health price target of $111.25 implies 8.69% upside potential to current levels.

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