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ICF International Benefits From Contract Wins & Acquisitions
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Shares of ICFInternational, Inc. (ICFI - Free Report) have gained 53.4% year to date, significantly outperforming the 16.6% rally of the industry it belongs to.
The company reported mixed second-quarter 2018 results, wherein earnings missed the Zacks Consensus Estimate but revenues surpassed the same.
Non-GAAP EPS of 80 cents missed the consensus mark by 10 cents but improved 9.6% on a year-over-year basis. Revenues totaled $324 million, which outpaced the consensus mark by $9 million and increased 5.8% year over year.
ICF’s earnings surprise history appears unimpressive. Although it exceeded estimates in two of the trailing four quarters, it matched estimates once and missed on another occasion, delivering an average negative surprise of 1.2%. For the third quarter, the consensus estimate has declined 1.9% over the past 30 days.
Government & Commercial Businesses in Good Shape
ICF is experiencing significant increase in international government work and stable revenue performance from federal, state and local government clients. The company continues to witness contract wins and growth in business development pipeline, a significant portion of which is represented by disaster recovery. This, in turn, has helped it to raise earnings and revenue guidance for 2018.
Currently, the company expects total revenues to be between $1.295 billion and $1.335 billion compared with $1.245 billion and $1.285 billion, anticipated earlier. The midpoint of the range is equivalent to 7% year-over-year growth, up from 2.9% growth rate expected previously. Non-GAAP EPS is projected to be in the $3.70-$3.90 band compared with the previous expectation of $3.60-$3.80.
ICF looks well-poised for additional contract wins in the federal government market because of the increased fiscal 2018 and 2019 civilian agency budgets, which were approved earlier this year. In the second half of 2018, ICF anticipates RFPs to be issued by civilian agency clients.
In the commercial business category, demand remains strong across the markets ICF serves. Within the group, marketing service along with loyalty marketing is benefiting from an increased focus on digital commerce and social media.
ICF’s commercial energy markets group also looks well positioned to benefit from advisory work connected to transformations in the utility industry and increase in mandated energy efficiency programs across the United States.
Strategic acquisitions are aiding ICF to enhance its subject matter knowledge, expand offerings and provide scale in geographies.
This month, the company acquired disaster planning and recovery services firm — DMS Disaster Consultants. This buyout should improve the company’s disaster response, recovery and preparedness offerings, and help it further expand into state and local government markets.
Further, the buyout of The Future Customer — a boutique loyalty strategy and marketing company — in January 2018 and Trade NTE — a strategic marketing and branding services company — in November 2016 are worth mentioning. While The Future Customer transaction has extended ICF’s loyalty business to Europe, Trade NTE boosted its branding services through existing involvements with clients.
The company continues to explore acquisition opportunities to gain new clients, increase presence in potential markets and strengthen its portfolio of services.
The long-term expected EPS (three to five years) growth rate for Genpact, WEX and Total System Services is 10%, 15% and 14.6%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
ICF International Benefits From Contract Wins & Acquisitions
Shares of ICF International, Inc. (ICFI - Free Report) have gained 53.4% year to date, significantly outperforming the 16.6% rally of the industry it belongs to.
The company reported mixed second-quarter 2018 results, wherein earnings missed the Zacks Consensus Estimate but revenues surpassed the same.
Non-GAAP EPS of 80 cents missed the consensus mark by 10 cents but improved 9.6% on a year-over-year basis. Revenues totaled $324 million, which outpaced the consensus mark by $9 million and increased 5.8% year over year.
ICF’s earnings surprise history appears unimpressive. Although it exceeded estimates in two of the trailing four quarters, it matched estimates once and missed on another occasion, delivering an average negative surprise of 1.2%. For the third quarter, the consensus estimate has declined 1.9% over the past 30 days.
Government & Commercial Businesses in Good Shape
ICF is experiencing significant increase in international government work and stable revenue performance from federal, state and local government clients. The company continues to witness contract wins and growth in business development pipeline, a significant portion of which is represented by disaster recovery. This, in turn, has helped it to raise earnings and revenue guidance for 2018.
Currently, the company expects total revenues to be between $1.295 billion and $1.335 billion compared with $1.245 billion and $1.285 billion, anticipated earlier. The midpoint of the range is equivalent to 7% year-over-year growth, up from 2.9% growth rate expected previously. Non-GAAP EPS is projected to be in the $3.70-$3.90 band compared with the previous expectation of $3.60-$3.80.
ICF looks well-poised for additional contract wins in the federal government market because of the increased fiscal 2018 and 2019 civilian agency budgets, which were approved earlier this year. In the second half of 2018, ICF anticipates RFPs to be issued by civilian agency clients.
In the commercial business category, demand remains strong across the markets ICF serves. Within the group, marketing service along with loyalty marketing is benefiting from an increased focus on digital commerce and social media.
ICF’s commercial energy markets group also looks well positioned to benefit from advisory work connected to transformations in the utility industry and increase in mandated energy efficiency programs across the United States.
ICF International, Inc. Revenue (TTM)
ICF International, Inc. Revenue (TTM) | ICF International, Inc. Quote
Acquisition — A Key Growth Strategy
Strategic acquisitions are aiding ICF to enhance its subject matter knowledge, expand offerings and provide scale in geographies.
This month, the company acquired disaster planning and recovery services firm — DMS Disaster Consultants. This buyout should improve the company’s disaster response, recovery and preparedness offerings, and help it further expand into state and local government markets.
Further, the buyout of The Future Customer — a boutique loyalty strategy and marketing company — in January 2018 and Trade NTE — a strategic marketing and branding services company — in November 2016 are worth mentioning. While The Future Customer transaction has extended ICF’s loyalty business to Europe, Trade NTE boosted its branding services through existing involvements with clients.
The company continues to explore acquisition opportunities to gain new clients, increase presence in potential markets and strengthen its portfolio of services.
Zacks Rank & Other Stocks to Consider
Currently, ICF carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the broader Business Services sector include Genpact Limited (G - Free Report) , WEX Inc. (WEX - Free Report) and Total System Services, Inc. . All the stocks carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term expected EPS (three to five years) growth rate for Genpact, WEX and Total System Services is 10%, 15% and 14.6%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>