Icon (ICLR) AI Stock Analysis

• Market Cap: $11.67B
• Dividend Yield: N/A
• Average Volume (3M): 1.19M
• Price to Earnings (P/E): 15.7
• Beta (1Y): 0.92
• Revenue Growth: -0.48%
• EPS Growth: 11.47%
• Country: US
• Employees: 41,250
• Sector: Healthcare
• Sector Strength: 42
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 3.19
• Shares Outstanding: 80,756,860
• 10 Day Avg. Volume: 1,287,105
• 30 Day Avg. Volume: 1,188,616
• PEG Ratio: 1.51
• Price to Book (P/B): 5.73
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 25.63
• Enterprise Value/Market Cap: 0.79
• Enterprise Value/Revenue: 0.28
• Enterprise Value/Gross Profit: 4.14
• Enterprise Value/Ebitda: 1.39
• 1Y Price Target: $163.00
• Price Target Upside: 12.76% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 73 Outperform
• Price Target: $161.00 ▲(11.37%Upside)

Icon's overall stock score is driven by its strong financial performance and reasonable valuation, which are somewhat offset by mixed technical indicators and challenges highlighted in the earnings call. The company's efficient cash flow management and operational efficiency are positives, but revenue decline and cancellations pose risks. Continued strategic focus could enhance long-term growth prospects.

Positive Factors

Growth potential

ICON is well-positioned for a fast snapback in growth once market conditions improve, despite current challenges.

Operational optimization

ICON is optimizing for resets to where the macro demand is, streamlining processes and platform technology across operational units, and leveraging automation and AI where fit.

Strategic alliances

Strategic alliances are gaining traction, both recent ones have mentioned awarded work, putting one ahead of schedule.

Negative Factors

Cancellation rates

Higher cancellation rates were a significant concern, with 1Q cancellations amounting to approximately 25% of gross bookings.

Market headwinds

ICLR is facing a multitude of market and customer-specific headwinds, with the magnitude of cuts being too much to overcome.

Pharma demand volatility

Large pharma demand continues to be mixed with RFP opportunities muted, linked to company-specific exposure to loss of exclusivity and overall budgetary spend.

Icon Business Overview & Revenue Model

Company Description

Icon (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 Money

Icon (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 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.

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.

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.

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
EBITDA	1.53B	1.56B	1.52B	1.41B	739.43M	488.83M
Net Income	758.19M	791.47M	612.34M	505.30M	153.19M	327.81M
Balance Sheet
Total Assets	16.72B	16.88B	16.99B	17.19B	17.39B	3.47B
Cash, Cash Equivalents and Short-Term Investments	526.70M	538.78M	380.06M	290.48M	753.92M	842.03M
Total Debt	3.56B	3.60B	3.94B	4.79B	5.60B	433.61M
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

• Technical Analysis Sentiment: Negative
• Last Price: 144.56
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 144.56 is above the 20-day moving average (MA) of 142.06, above the 50-day MA of 139.37, and below the 200-day MA of 198.13, indicating a neutral trend. The MACD of 2.20 indicates Negative momentum. The RSI at 53.47 is Neutral, neither overbought nor oversold. The STOCH value of 58.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ICLR.

Icon Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LH	77 Outperform	$21.80B	30.06	8.98%	1.10%	7.13%	74.73%
WST	74 Outperform	$15.72B	34.37	17.42%	0.38%	-1.14%	-16.35%
ICLR	73 Outperform	$11.67B	15.73	8.01%	―	-0.48%	11.47%
MEDP	72 Outperform	$8.93B	23.71	65.82%	―	9.87%	32.81%
PEN	70 Outperform	$9.93B	240.51	3.50%	―	13.17%	-54.30%
RVTY	68 Neutral	$11.53B	38.68	3.82%	0.29%	1.62%	78.53%
Sector *	48 Neutral	AU$2.43B	4.28	-64.25%	2.88%	35.15%	13.63%