Medidata Solutions (MDSO) develops and deploys technological solution used in the clinical trial process and supply trial management by pharmaceutical, biotechnology and medical device companies. Revenue is expected to grow by 15% in 2012 and 13% in 2013.
The company earned $1.60 on a GAAP basis and $1.51 on a non-GAAP basis in 2011, which included a litigation settlement of $6.3 million and a tax benefit of about $19.0 million. When I factor out those special items and apply a normalized tax rate of 40%, the company earned about 40 cents per share in 2011.
Analysts expect MDSO to earn $1.12 in 2012 and in $1.42 in 2013. When I look forward to the company's normalized earnings, the stock has ample growth to warrant a PE of around 25 to 30 times earnings.-- Written by Scott Rothbort in Millburn, N.J.
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