Medidata Solutions: Attractive Addressable Market, But More Work Is Needed

Large addressable markets are all well and good, but delivering on those opportunities isn’t always so easy. That’s a key challenge for Medidata Solutions (MDSO), as this company has an excellent electronic data capture platform for pharmaceutical clinical trials and has built out a strong suite of ancillary products, but must continue to cross-sell and get customers to subscribe to those additional products to maximize revenue and margins. Likewise, while Medidata has the ingredients in place for strong data analytics offerings, designing the products and getting customers onboard will take time.

I liked the opportunity I saw earlier this year with Medidata and the shares are up more than 10% since then. The valuation is somewhat less compelling now; although there is still some decent upside at today’s price, I’m a little concerned that slowing subscription growth and the need to spend more on sales and marketing to revitalize growth could weigh on sentiment. Still, given the long-term cross-selling and data-driven product opportunities, I’d keep an eye on this name in case the stock price and underlying valuation diverge again.

Click here for the full article:
Medidata Solutions: Attractive Addressable Market, But More Work Is Needed