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Icon plc (ICLR)
NASDAQ:ICLR
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Icon
(NASDAQ:ICLR)
Rating:64Neutral
Price Target:―
Positive Factors
Growth Prospects
The company suggested that it expects to see significant green shoots that should set it up on a nice pathway to return to its organic growth targets.
Share Repurchase
Management will be active in utilizing the $750M remaining in its share repurchase authorization.
Strategic Alliances
Strategic alliances are gaining traction, both recent ones have mentioned awarded work, putting one ahead of schedule.
Negative Factors
Cancellations
Higher cancellation rates were a significant concern, with 1Q cancellations amounting to approximately 25% of gross bookings.
Market Uncertainty
The company is continuing to see broader macro uncertainty accentuate market risks as it progressed through the year.
Revenue Growth Challenges
Large pharma's shift to FSP models and declining sales amongst ICLR's top two customers are creating further pressure on '26 revenue growth.
Icon (ICLR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.89B
Dividend YieldN/A
Average Volume (3M)1.64M
Price to Earnings (P/E)15.1
Beta (1Y)0.98
Revenue Growth-0.48%
EPS Growth11.47%
CountryUS
Employees41,250
SectorHealthcare
Sector Strength42
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)3.19
Shares Outstanding80,756,860
10 Day Avg. Volume1,062,078
30 Day Avg. Volume1,643,783
Financial Highlights & Ratios
PEG Ratio-3.65
Price to Book (P/B)1.15
Price to Sales (P/S)0.00
P/FCF Ratio10.24
Enterprise Value/Market Cap1.27
Enterprise Value/Revenue0.42
Enterprise Value/Gross Profit6.22
Enterprise Value/Ebitda2.08
Forecast
1Y Price Target
$171.25Price Target Upside23.10% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
Icon Business Overview & Revenue Model
Company DescriptionIcon (ICLR) is a global provider of outsourced development and commercialization services to the pharmaceutical, biotechnology, and medical device industries. The company operates in the healthcare sector, offering a comprehensive range of services that span the entire lifecycle of product development, from early-phase research and clinical development to post-approval and market access services. Icon's core services include clinical trial management, data analytics, consulting, and laboratory services, enabling clients to accelerate the development of new therapies and medical innovations.
How the Company Makes MoneyIcon (ICLR) generates revenue primarily through contracts with pharmaceutical, biotechnology, and medical device companies that seek to outsource their clinical research and development activities. The company's key revenue streams include fees for clinical trial management, data management, laboratory services, and consulting. These services help clients bring new drugs and medical devices to market more efficiently and cost-effectively. Icon also collaborates with various healthcare organizations and leverages technology-driven solutions to enhance its service offerings, which contributes to its earnings. Strategic partnerships and long-term service agreements with major pharmaceutical companies are significant factors that bolster Icon's revenue growth.
Icon Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: -8.14%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Negative
The earnings call highlighted the company's achievements in operational efficiency and strategic expansions, particularly in AI and partnerships. However, these positive aspects were overshadowed by significant challenges, including revenue declines, elevated cancellations, and the impact of cancelled COVID trials on guidance. The overall sentiment reflects a cautious outlook due to ongoing market uncertainties.Q1-2025 Updates
Positive Updates
Adjusted EBITDA Margin Performance
Achieved better than expected adjusted EBITDA margin performance of 19.5% in Q1, demonstrating effective management and alignment of resources with the work in backlog.
AI Tools Implementation
Released two new AI-enabled tools, iSubmit and SmartDraft, to automate clinical trial processes, improving compliance and operational efficiencies.
Strategic Partnerships and Expansions
Secured a new partnership award in laboratory services with an existing large pharma strategic customer, expanding position and providing additional growth opportunities.
Share Repurchase Program
Executed $250 million in share repurchases at an average price of $184 per share, with plans to continue active buybacks.
Negative Updates
Revenue Decline
Quarterly revenue decreased by 4.3% year-over-year, with a constant currency decline of 3.2%.
Elevated Cancellations
Experienced elevated levels of project cancellations, impacting bookings and book-to-bill ratio, which decreased to 1.01 times.
Next Gen COVID Trials Impact
Updated full-year guidance to reflect the cancellation and delays of next generation COVID trials, impacting approximately $350 million in expected revenue.
Decline in Adjusted Net Income
Adjusted net income for the quarter was $258.3 million, representing an 8.1% decrease year-over-year.
Company Guidance
In the ICON plc Q1 2025 earnings call, the company provided updated guidance reflecting the current market challenges and opportunities. The full-year revenue guidance was adjusted down by $400 million at the midpoint, primarily due to the removal of two next-generation COVID vaccine trials, which accounted for $350 million in expected revenue. The company reported a book-to-bill ratio of 1.01 for Q1, highlighting mixed dynamics in opportunity flow, with increased cancellations impacting bookings. Adjusted EBITDA margin for the quarter was 19.5%, indicating effective cost control and operational alignment. The guidance assumes continued elevated cancellations and cautious customer behavior, with a focus on navigating the uncertain environment while capitalizing on strategic partnerships and innovation efforts. Despite the challenges, ICON remains optimistic about mid-to-long-term growth opportunities, supported by its strong balance sheet and ongoing investments in digital innovation and cost efficiencies.Icon Financial Statement Overview
Summary
Icon's financial performance is strong, characterized by robust profitability and efficient cash flow management. The company maintains a healthy balance sheet with a conservative leverage approach. While revenue growth has slightly declined, the company remains profitable with efficient cost control and effective asset utilization. Continued focus on revenue growth and asset optimization will further enhance financial stability.Income Statement
Icon's TTM results show a strong gross profit margin of 27.18%, indicating efficient cost management. The net profit margin of 9.26% is healthy for the industry, and EBIT and EBITDA margins of 13.24% and 18.73% respectively suggest solid operational efficiency. Despite a slight decline in revenue compared to the previous year, the company's profitability metrics remain robust, reflecting an overall stable performance.85
Very Positive
Balance Sheet
The debt-to-equity ratio stands at 0.37, indicating a conservative leverage approach. Return on equity is a strong 7.98%, showcasing effective utilization of shareholders' funds. However, the equity ratio of 56.79% suggests a moderate reliance on debt, which is typical for the industry. The balance sheet is stable, but there is room for improvement in asset utilization.78
Positive
Cash Flow
Icon demonstrates strong cash flow management with a free cash flow to net income ratio of 1.39, indicating excellent conversion of profits into cash. The operating cash flow to net income ratio of 1.62 further supports operational efficiency. A significant free cash flow growth rate of 3.51% showcases positive cash flow trends, despite a decrease in net income.80
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 8.19B | 8.28B | 8.12B | 7.74B | 5.48B | 2.80B | Gross Profit |
| 2.23B | 2.44B | 2.40B | 2.21B | 1.51B | 808.03M | EBIT |
| 1.08B | 1.10B | 956.15M | 795.24M | 608.47M | 391.97M | EBITDA |
| 1.53B | 1.56B | 1.52B | 1.41B | 739.43M | 488.83M | Net Income Common Stockholders |
| 758.19M | 791.47M | 612.34M | 505.30M | 153.19M | 327.81M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 526.70M | 538.78M | 380.06M | 290.48M | 753.92M | 842.03M | Total Assets |
| 16.72B | 16.88B | 16.99B | 17.19B | 17.39B | 3.47B | Total Debt |
| 3.56B | 3.60B | 3.94B | 4.79B | 5.60B | 433.61M | Net Debt |
| 3.03B | 3.06B | 3.56B | 4.50B | 4.84B | -406.69M | Total Liabilities |
| 7.22B | 7.35B | 7.75B | 8.69B | 9.32B | 1.59B | Stockholders Equity |
| 9.50B | 9.52B | 9.24B | 8.50B | 8.07B | 1.88B |
| Cash Flow | Free Cash Flow | ||||
| 1.06B | 1.12B | 1.02B | 421.15M | 735.39M | 543.67M | Operating Cash Flow |
| 1.23B | 1.29B | 1.16B | 563.32M | 829.14M | 594.72M | Investing Cash Flow |
| -264.41M | -266.79M | -226.65M | -145.87M | -6.02B | -46.58M | Financing Cash Flow |
| -824.98M | -837.18M | -844.04M | -864.17M | 5.11B | -235.02M |
Icon Technical Analysis
Neutral
139.11
Price Trends
142.96
Negative
167.26
Negative
210.14
Negative
Market Momentum
-2.34
Negative
53.07
Neutral
70.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ICLR, the sentiment is Neutral. The current price of 139.11 is above the 20-day moving average (MA) of 132.67, below the 50-day MA of 142.96, and below the 200-day MA of 210.14, indicating a neutral trend. The MACD of -2.34 indicates Negative momentum. The RSI at 53.07 is Neutral, neither overbought nor oversold. The STOCH value of 70.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ICLR.
Icon Risk Analysis
Icon disclosed 57 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 2 New Risks
1.
Impairment of goodwill and intangible assets may adversely impact future results of operations. Q4, 2024
2.
Our financial results and ability to access cost effective debt may be adversely impacted if we do not maintain our credit rating. Q4, 2024
Icon Peers Comparison
Overall Rating
UnderperformOutperform
Sector (54)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $21.10B | 29.09 | 8.98% | 1.13% | 7.13% | 74.73% | |
72 Outperform | $15.70B | 34.32 | 17.42% | 0.37% | -1.14% | -16.35% | |
70 Outperform | $10.03B | 242.82 | 3.50% | ― | 13.17% | -54.30% | |
65 Neutral | $10.67B | 35.78 | 3.82% | 0.31% | 1.62% | 78.53% | |
64 Neutral | $10.89B | 15.14 | 8.01% | ― | -0.48% | 11.47% | |
63 Neutral | $8.52B | 22.63 | 65.82% | ― | 9.87% | 32.81% | |
54 Neutral | $5.31B | 3.29 | -45.39% | 2.79% | 16.77% | -0.07% |
* Healthcare Sector Average
Performance Comparison
ICLR
Icon
139.11
-180.73
-56.51%
LH
Labcorp Holdings
253.97
60.37
31.18%
RVTY
Revvity
91.97
-17.05
-15.64%
WST
West Pharmaceutical Services
224.69
-94.23
-29.55%
PEN
Penumbra
258.90
70.84
37.67%
MEDP
Medpace Holdings
296.50
-109.18
-26.91%
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.