UFP Technologies (UFPT): Buy, Sell, or Hold Post Q3 Earnings?

As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the drug development inputs & services industry, including Medpace and its peers.

Companies specializing in drug development inputs and services play a crucial role in the pharmaceutical and biotechnology value chain. Essential support for drug discovery, preclinical testing, and manufacturing means stable demand, as pharmaceutical companies often outsource non-core functions with medium to long-term contracts. However, the business model faces high capital requirements, customer concentration, and vulnerability to shifts in biopharma R&D budgets or regulatory frameworks. Looking ahead, the industry will likely enjoy tailwinds such as increasing investment in biologics, cell and gene therapies, and advancements in precision medicine, which drive demand for sophisticated tools and services. There is a growing trend of outsourcing in drug development for nimbleness and cost efficiency, which benefits the industry. On the flip side, potential headwinds include pricing pressures as efforts to contain healthcare costs are always top of mind. An evolving regulatory backdrop could also slow innovation or client activity.

The 8 drug development inputs & services stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.9%.

Thankfully, share prices of the companies have been resilient as they are up 9.2% on average since the latest earnings results.

Best Q3: Medpace

Founded in 1992 as a scientifically-driven alternative to traditional contract research organizations, Medpace provides outsourced clinical trial management and research services to help pharmaceutical, biotechnology, and medical device companies develop new treatments.

Medpace reported revenues of $659.9 million, up 23.7% year on year. This print exceeded analysts’ expectations by 2.7%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ organic revenue estimates and a solid beat of analysts’ full-year EPS guidance estimates.

Medpace scored the fastest revenue growth but had the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is up 13.4% since reporting and currently trades at $619.75.

We think Medpace is a good business, but is it a buy today? Read our full report here, it’s free for active Edge members.

UFP Technologies

With expertise dating back to 1963 in specialized materials and precision manufacturing, UFP Technologies designs and manufactures custom solutions for medical devices, sterile packaging, and other highly engineered products for healthcare and industrial applications.

UFP Technologies reported revenues of $154.6 million, up 6.5% year on year, outperforming analysts’ expectations by 3.3%. The business had a very strong quarter with an impressive beat of analysts’ revenue and EPS estimates.

The market seems happy with the results as the stock is up 11.5% since reporting. It currently trades at $221.97.

Is now the time to buy UFP Technologies? Access our full analysis of the earnings results here, it’s free for active Edge members.

Slowest Q3: Azenta

Serving as the guardian of some of medicine's most valuable materials, Azenta provides biological sample management, storage, and genomic services that help pharmaceutical and biotechnology companies preserve and analyze critical research materials.

Azenta reported revenues of $159.2 million, up 5.5% year on year, exceeding analysts’ expectations by 1.6%. Still, it was a slower quarter as it posted EPS in line with analysts’ estimates.

Interestingly, the stock is up 22.9% since the results and currently trades at $36.86.

Read our full analysis of Azenta’s results here.

IQVIA

Created from the 2016 merger of Quintiles (a clinical research organization) and IMS Health (a healthcare data specialist), IQVIA provides clinical research services, data analytics, and technology solutions to help pharmaceutical companies develop and market medications more effectively.

IQVIA reported revenues of $4.1 billion, up 5.2% year on year. This print topped analysts’ expectations by 0.5%. However, it was a mixed quarter as it failed to impress in some other areas of the business.

IQVIA delivered the highest full-year guidance raise but had the weakest performance against analyst estimates among its peers. The stock is up 4.7% since reporting and currently trades at $227.60.

Read our full, actionable report on IQVIA here, it’s free for active Edge members.

West Pharmaceutical Services

Founded in 1923 and serving as a critical link in the pharmaceutical supply chain, West Pharmaceutical Services manufactures specialized packaging, containment systems, and delivery devices for injectable drugs and healthcare products.

West Pharmaceutical Services reported revenues of $804.6 million, up 7.7% year on year. This number beat analysts’ expectations by 2.1%. Overall, it was a very strong quarter as it also recorded a solid beat of analysts’ full-year EPS guidance estimates and a beat of analysts’ EPS estimates.

The stock is flat since reporting and currently trades at $274.44.

Read our full, actionable report on West Pharmaceutical Services here, it’s free for active Edge members.

What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Health Insurance Providers company Clover Health jumped 5.3%. Is now the time to buy Clover Health? Access our full analysis report here, it’s free for active Edge members.
• Healthcare Technology for Patients company GoodRx jumped 4.7%. Is now the time to buy GoodRx? Access our full analysis report here, it’s free for active Edge members.
• Therapeutics company Moderna jumped 5.1%. Is now the time to buy Moderna? Access our full analysis report here, it’s free for active Edge members.
• Drug Development Inputs & Services company UFP Technologies jumped 5.3%. Is now the time to buy UFP Technologies? Access our full analysis report here, it’s free for active Edge members.
• Patient Monitoring company Masimo jumped 4.4%. Is now the time to buy Masimo? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Clover Health (CLOV)

Clover Health’s shares are extremely volatile and have had 35 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 15 days ago when the stock dropped 8.4% on the news that the stock's negative momentum continued as the company reported disappointing third-quarter 2025 financial results and cut its full-year profitability forecast. 

Although revenue grew by 50.1% year-over-year to $496.7 million, beating expectations due to strong membership growth, the company's profitability raised concerns. Clover Health posted a net loss of $0.05 per share, which missed analyst estimates. Management pointed to higher-than-expected medical costs and increased healthcare usage from a surge of new members as reasons for the weaker results. More importantly, the company significantly lowered its full-year adjusted EBITDA guidance to a range of $15 million to $30 million, down from the previous forecast of $50 million to $70 million. This weaker outlook overshadowed the top-line growth, signaling to investors that near-term margins and profits were under pressure.

Clover Health is down 27.5% since the beginning of the year, and at $2.27 per share, it is trading 52.9% below its 52-week high of $4.82 from January 2025. Investors who bought $1,000 worth of Clover Health’s shares 5 years ago would now be looking at an investment worth $226.77.

As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the drug development inputs & services industry, including UFP Technologies and its peers.

Companies specializing in drug development inputs and services play a crucial role in the pharmaceutical and biotechnology value chain. Essential support for drug discovery, preclinical testing, and manufacturing means stable demand, as pharmaceutical companies often outsource non-core functions with medium to long-term contracts. However, the business model faces high capital requirements, customer concentration, and vulnerability to shifts in biopharma R&D budgets or regulatory frameworks. Looking ahead, the industry will likely enjoy tailwinds such as increasing investment in biologics, cell and gene therapies, and advancements in precision medicine, which drive demand for sophisticated tools and services. There is a growing trend of outsourcing in drug development for nimbleness and cost efficiency, which benefits the industry. On the flip side, potential headwinds include pricing pressures as efforts to contain healthcare costs are always top of mind. An evolving regulatory backdrop could also slow innovation or client activity.

The 7 drug development inputs & services stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.1%.

Thankfully, share prices of the companies have been resilient as they are up 7.1% on average since the latest earnings results.

UFP Technologies

With expertise dating back to 1963 in specialized materials and precision manufacturing, UFP Technologies designs and manufactures custom solutions for medical devices, sterile packaging, and other highly engineered products for healthcare and industrial applications.

UFP Technologies reported revenues of $154.6 million, up 6.5% year on year. This print exceeded analysts’ expectations by 3.3%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

“I am pleased with our third quarter results and continued progress with our strategic initiatives,” said R. Jeffrey Bailly, Chairman and CEO.

Interestingly, the stock is up 22.8% since reporting and currently trades at $245.

Is now the time to buy UFP Technologies? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Medpace

Founded in 1992 as a scientifically-driven alternative to traditional contract research organizations, Medpace provides outsourced clinical trial management and research services to help pharmaceutical, biotechnology, and medical device companies develop new treatments.

Medpace reported revenues of $659.9 million, up 23.7% year on year, outperforming analysts’ expectations by 2.7%. The business had an exceptional quarter with a solid beat of analysts’ organic revenue estimates and a solid beat of analysts’ full-year EPS guidance estimates.

Medpace scored the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 10.1% since reporting. It currently trades at $602.77.

Is now the time to buy Medpace? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: IQVIA

Created from the 2016 merger of Quintiles (a clinical research organization) and IMS Health (a healthcare data specialist), IQVIA provides clinical research services, data analytics, and technology solutions to help pharmaceutical companies develop and market medications more effectively.

IQVIA reported revenues of $4.1 billion, up 5.2% year on year, exceeding analysts’ expectations by 0.5%. Still, it was a mixed quarter because it struggled in other parts of the business.

IQVIA delivered the highest full-year guidance raise but had the weakest performance against analyst estimates in the group. The stock is flat since the results and currently trades at $218.81.

Read our full analysis of IQVIA’s results here.

West Pharmaceutical Services

Founded in 1923 and serving as a critical link in the pharmaceutical supply chain, West Pharmaceutical Services manufactures specialized packaging, containment systems, and delivery devices for injectable drugs and healthcare products.

West Pharmaceutical Services reported revenues of $804.6 million, up 7.7% year on year. This number beat analysts’ expectations by 2.1%. It was a very strong quarter as it also logged an impressive beat of analysts’ full-year EPS guidance estimates and a beat of analysts’ EPS estimates.

The stock is flat since reporting and currently trades at $277.41.

Read our full, actionable report on West Pharmaceutical Services here, it’s free for active Edge members.

Fortrea

Spun off from Labcorp in 2023 to focus exclusively on clinical research services, Fortrea is a contract research organization that helps pharmaceutical, biotech, and medical device companies develop and bring their products to market through clinical trials and support services.

Fortrea reported revenues of $701.3 million, up 3.9% year on year. This print surpassed analysts’ expectations by 8.2%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ revenue estimates and full-year revenue guidance exceeding analysts’ expectations.

Fortrea achieved the biggest analyst estimates beat among its peers. The stock is up 22.7% since reporting and currently trades at $11.90.

Read our full, actionable report on Fortrea here, it’s free for active Edge members.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.