Buffett Brain · Research note
Score updated 27 Oct 2026 · analysis from 27 Jul 2026
MEDP· Healthcare
Medpace Holdings
Medpace's strong ROIC of 56% and consistent profitability contrasts with its high valuation and low gross margins, raising concerns about future growth sustainability.
Buffett fit
Partial fit
Owner
73
Durability
100
Management
73
Price
40
Score updated 27 Oct 2026 · analysis from 27 Jul 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Healthcare stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned Medpace outright, I'd focus on its impressive 5-year revenue CAGR of 21.99% and 32.59% EPS CAGR to drive growth.
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The business has shown consistent profitability with no EPS decline over the past 5 years, indicating strong durability.
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Medpace has a share count CAGR of -5.3%, indicating effective through , yet its market cap has decreased relative to retained earnings by 8.69%.
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With an yield of 5.75% and a of 25.7, the valuation does not provide a sufficient .
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 56.1% is in the top quintile for the healthcare sector, indicating strong capital efficiency.
- 25-year EPS CAGR of 32.59% demonstrates robust growth potential.
- 3 of $681.87M shows strong cash generation capabilities.
- 4 of 21.0% exceeds the sector top-quintile cutoff of 16.2%.
Concerns
5- 1 of 29.1% is significantly below the sector top-quintile cutoff of 77.9%, indicating potential issues.
- 2 of 25.7 suggests the stock is overvalued relative to earnings.
- 3Current ratio of 0.85 raises concerns about short-term liquidity.
- 4High valuation metrics like EV/ of 21.2 do not support long-term growth expectations.
Price history
$677+198.7%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Medpace provides comprehensive clinical research services across various stages of drug and medical device development, generating $2.53B in revenue. Its services are essential for pharmaceutical and biotech companies, ensuring steady cash flows. The company has maintained a of $681.87M, indicating strong unit economics.
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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