Medpace downgraded to Buy as backlog cancellations rise despite strong Q1 revenue growth

Medpace Holdings was downgraded from 'Strong Buy' to 'Buy' due to increasing backlog cancellations and higher direct costs, even though it reported strong Q1 2026 revenue growth of $706.6 million, up 26.5% year-over-year. The company beat both revenue and earnings expectations and saw solid growth in new business awards. However, the Net Book-to-Bill ratio dropped to 0.88x, reflecting the highest backlog cancellations in over a year, which raises caution. Medpace raised its full-year 2026 revenue guidance to $2.755 billion–$2.855 billion, but ongoing risks from cancellations and costs could lead to further rating downgrades.