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Icon plc (ICLR)
NASDAQ:ICLR
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Icon
(NASDAQ:ICLR)81Outperform
Positive Factors
Financial Performance
ICLR reported a quarter that showed signs of stabilization to modest improvement.
Share Repurchase
ICLR's recently-increased share repurchase authorization may allow the company to take advantage of the depressed stock valuation.
Negative Factors
Revenue Impact
The lost revenue from the trial delay will be felt, with potential decremental margin risk due to idle resource allocation.
Trial Delays
The delay of a Covid vaccine trial is another market-driven challenge piling on recent pressures for ICLR and the broader CRO landscape.
Icon (ICLR) vs. S&P 500 (SPY)
Market Cap
$15.07B
Dividend YieldN/A
Average Volume (3M)961.32K
Price to Earnings (P/E)19.6
Beta (1Y)1.19
Revenue Growth1.99%
EPS Growth28.86%
CountryUS
Employees41,100
SectorHealthcare
Sector Strength74
IndustryMedical Diagnostics & Screening
Share Statistics
EPS (TTM)9.54
Shares Outstanding80,756,860
10 Day Avg. Volume972,722
30 Day Avg. Volume961,320
Financial Highlights & Ratios
PEG Ratio0.68
Price to Book (P/B)N/A
Price to Sales (P/S)1.82
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$252.14Price Target Upside37.99% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering15
Icon Business Overview & Revenue Model
Company DescriptionICON plc (ICLR) is a global provider of outsourced development and commercialization services to pharmaceutical, biotechnology, medical device, and government organizations. The company operates within the life sciences sector, offering a comprehensive range of services that cover all stages of the clinical development process, from Phase I to Phase IV clinical trials. ICON's core services include clinical trial management, data analytics, regulatory consulting, and laboratory services, all designed to accelerate the development of new medical treatments and ensure regulatory compliance.
How the Company Makes MoneyICON plc makes money primarily through its contract research organization (CRO) services, which are sold to pharmaceutical, biotechnology, and medical device companies. The company's revenue model is based on service contracts that include clinical trial management, consulting, and laboratory testing. Key revenue streams come from long-term partnerships with major pharmaceutical companies and government organizations, which rely on ICON for their expertise in managing complex clinical trials and navigating regulatory requirements. ICON's strategic acquisitions and investments in technology and data analytics also enhance its service offerings, allowing the company to provide more comprehensive solutions to its clients and drive additional revenue.
Icon Financial Statement Overview
Summary
Icon exhibits strong financial performance with consistent revenue growth, solid profitability margins, and a robust balance sheet. Effective cash flow management supports strategic investments. However, there's room for improvement in return on equity.Income Statement
Icon has demonstrated strong revenue growth, with a 2% increase from 2023 to 2024 and an impressive growth trajectory over the past five years. The gross profit margin remains robust at 29.42%, indicating effective cost management. The net profit margin is healthy at 9.55%, showing improved profitability. EBIT and EBITDA margins are strong at 13.25% and 20.62%, respectively, reflecting efficient operations and good earnings quality.92
Very Positive
Balance Sheet
Icon maintains a stable financial position with a debt-to-equity ratio of 0.37, suggesting moderate leverage. The ROE stands at 8.31%, indicating decent profitability relative to equity. The equity ratio is 56.43%, highlighting a solid equity base. Overall, the balance sheet reflects a well-managed financial structure, though there's room for enhancing return metrics.88
Very Positive
Cash Flow
Operating cash flow has grown steadily, supporting a strong free cash flow position. The free cash flow to net income ratio is 1.41, indicating effective cash generation relative to profitability. However, the operating cash flow to net income ratio of 1.63 suggests potential for improvement. Overall, cash flow management appears solid, with positive free cash flow growth.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 8.28B | 8.12B | 7.74B | 5.48B | 2.80B | Gross Profit |
| 2.44B | 2.40B | 2.21B | 1.51B | 808.03M | EBIT |
| 1.10B | 956.15M | 795.24M | 608.47M | 391.97M | EBITDA |
| 1.59B | 1.52B | 1.41B | 739.43M | 488.83M | Net Income Common Stockholders |
| 791.47M | 612.34M | 505.30M | 153.19M | 327.81M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 538.78M | 380.06M | 290.48M | 753.92M | 842.03M | Total Assets |
| 16.88B | 16.99B | 17.19B | 17.39B | 3.47B | Total Debt |
| 3.57B | 3.94B | 4.79B | 5.60B | 433.61M | Net Debt |
| 3.03B | 3.56B | 4.50B | 4.84B | -406.69M | Total Liabilities |
| 7.35B | 7.75B | 8.69B | 9.32B | 1.59B | Stockholders Equity |
| 9.52B | 9.24B | 8.50B | 8.07B | 1.88B |
| Cash Flow | Free Cash Flow | |||
| 1.12B | 1.02B | 421.15M | 735.39M | 543.67M | Operating Cash Flow |
| 1.29B | 1.16B | 563.32M | 829.14M | 594.72M | Investing Cash Flow |
| -266.79M | -226.65M | -145.87M | -6.02B | -46.58M | Financing Cash Flow |
| -837.18M | -844.04M | -864.17M | 5.11B | -235.02M |
Icon Technical Analysis
Negative
182.72
Price Trends
199.33
Negative
212.24
Negative
263.15
Negative
Market Momentum
-3.84
Positive
37.00
Neutral
24.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ICLR, the sentiment is Negative. The current price of 182.72 is below the 20-day moving average (MA) of 189.93, below the 50-day MA of 199.33, and below the 200-day MA of 263.15, indicating a bearish trend. The MACD of -3.84 indicates Positive momentum. The RSI at 37.00 is Neutral, neither overbought nor oversold. The STOCH value of 24.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ICLR.
Icon Risk Analysis
Icon disclosed 55 risk factors in its most recent earnings report. Icon reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Icon Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $15.07B | 19.56 | 8.44% | ― | 1.99% | 28.86% | |
73 Outperform | $10.14B | 26.34 | 58.41% | ― | 11.84% | 42.04% | |
70 Outperform | $33.79B | 25.56 | 22.55% | ― | 2.95% | 2.46% | |
61 Neutral | $9.00B | 685.85 | 0.45% | ― | -1.92% | -96.95% | |
60 Neutral | $13.70B | 261.03 | 0.76% | ― | 14.76% | -88.32% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
ICLR
Icon
182.72
-149.66
-45.03%
CRL
Charles River Labs
175.12
-87.97
-33.44%
INCY
Incyte
71.13
10.34
17.01%
IQV
IQVIA Holdings
188.78
-69.80
-26.99%
MEDP
Medpace Holdings
337.41
-65.93
-16.35%
Icon Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -4.50% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with significant progress in business development and cost management, yet faced challenges with revenue decline and elevated cancellations. The demand environment remains volatile, especially in the biotech sector, impacting overall growth expectations.Highlights
Improved Business Development Performance
Gross bookings in Q4 2024 were $3.06 billion, increasing 8% sequentially and 3% year-over-year. The backlog grew to $24.7 billion, representing an increase of 1.4% from Q3 2024 and 8.3% year-over-year.
Cost Management Success
ICON achieved its target of free cash flow of $1.1 billion for the full year 2024, an increase of 10% over 2023. The company exceeded its target of 3.5 million hours delivered in automation in 2024, aiming for over 5 million hours in 2025.
Strong Financial Position
ICON ended 2024 with a leverage ratio of 1.7x net debt to adjusted EBITDA and repurchased $500 million in shares during the year, with plans to continue repurchasing in 2025.
Positive Trends in Digital Innovation
Year-over-year, ICON delivered 10% faster site activation, 33 fewer non-recruiting sites, and a 24% increase in trials completed on time.
Lowlights
Revenue Decline
Q4 2024 revenue was $2.04 billion, representing a year-on-year decrease of 1.2%.
Elevated Cancellations
Overall cancellations in Q4 2024 totaled $651 million, impacting all divisions and pressuring near-term revenue and margin.
Margin Pressure
Adjusted EBITDA for Q4 2024 was $423 million or 20.7% of revenue, a year-on-year decrease of 5.7% from the same period in 2023.
Mixed Demand Environment
The biotech market continues to experience careful capital allocation and slower decision-making, impacting trial starts and revenue conversion.
Company Guidance
During the ICON Q4 Earnings Conference Call, the company reaffirmed its full-year guidance for 2025, citing mixed conditions in the market. ICON reported Q4 2024 revenue of $2.04 billion, marking a 1.2% year-over-year decline, while full-year 2024 revenue reached $8.28 billion, up 2% from 2023. Adjusted EBITDA for Q4 was $423 million, or 20.7% of revenue, and for the full year, it was $1.74 billion, a 2.5% increase from 2023. The net book-to-bill ratio stood at 1.18x in Q4 and 1.2x on a trailing 12-month basis, reflecting $3.06 billion in gross bookings and $651 million in cancellations. The company achieved a backlog of $24.7 billion at the end of 2024, representing an 8.3% year-over-year increase. ICON's automation strategy saved over $100 million in total costs annually, and the company repurchased $500 million in shares during 2024. Despite market volatility, ICON expressed confidence in its strategic partnerships and digital innovation strategy, projecting a continued positive outlook for 2026.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.