Medidata lauded on Wall Street; CEO takes shot at rival Oracle
Medidata Solutions ($MDSO) has impressed industry watchers with strong financial performance and sunny projections for 2012, earning the company some positive buzz in the press and at least one stock upgrade from "hold" to "buy." At the close of the market on Friday, the provider of web-based software for clinical development was up just shy of 17% for the year.
With New York-based Medidata winning some media attention amid the rally, CEO Tarek Sherif took the opportunity in an interview with Xconomy to note some of the advantages of his company's software-as-a-service model over the more traditional licensing strategy at rival Oracle ($ORCL).
Based on several of Medidata's above-average financial scores, TheStreet boosted its stock rating for the company from "hold" to "buy." The investor pub pointed out on March 15 that the company beat the S&P 500 with net income growth of 40.6% in the fourth quarter of 2011 compared with the year-earlier quarter, has a clean balance sheet going into 2012 and a gross profit margin of 77.2%, among other positive indicators.
As Xconomy noted, most of Medidata's stock growth this year has happened since March 6, when the company surprised Wall Street with very upbeat revenue projections for the year. The company expects to bring in $210 million to $215 million this year--a healthy jump from the $184.5 million in 2011 revenue.
Medidata's display of growth prowess shows that the company, whose market cap is less than $700 million, has been able to go toe-to-toe with software giant Oracle and come away with new business from major drugmakers and CROs.
"They still have a business model that's much more focused on the traditional perpetual-license software, with a heavy implementation cycle and significant upgrade cycle," Medidata's Tarek told Xconomy of rival Oracle. "Our products are really much more cloud-based," and built so that drug developers can easily log onto the web and customize Medidata's tools themselves to fit their own needs.