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ICF (ICFI) Down 6.3% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for ICF International (ICFI - Free Report) . Shares have lost about 6.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is ICF due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

ICF International Surpasses Q1 Earnings & Revenue Estimates

ICF International delivered impressive first-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate. Non-GAAP earnings of $1.13 per share surpassed the Zacks Consensus Estimate by 34.5% and increased 36.1% on a year-over-year basis. Moreover, revenues of $378.5 million surpassed the consensus mark by 4.7% and increased 5.6% year over year owing to increase in service revenues.

Revenues in Detail

Revenues from government clients came in at $270.1 million, up 12.9% on a year-over-year basis. The U.S. federal government revenues of $175.9 million increased 13.1% year over year and contributed 46% of total revenues. The U.S. state and local government revenues of $57.2 million declined 6.1% year over year and contributed 15% of total revenues. International government revenues of $37.1 million were down 62.5% year over year, contributing 10% of total revenues.

Commercial revenues totaled $108.4 million, down 8.8% from the year-ago quarter’s figure and contributed 29% of total revenues. Energy markets and marketing services contributed 58% and 33%, respectively, of commercial revenues.

Backlog and Value of Contracts

Total backlog and funded backlog amounted to $3 billion and $1.6 billion at the end of the quarter, respectively. The total value of contracts awarded in the quarter came in at $596.1 million, up 67% year over year.

Operational Results

Adjusted EBITDA of $37.7 million increased 34.9% from the year-ago quarter’s figure. Adjusted EBITDA margin on revenues of 9.6% increased 220 basis points (bps) year over year. Adjusted EBITDA margin on service revenues was 13.5%, up 260 bps year over year.

Balance Sheet

ICF exited the quarter with cash and cash equivalent balance of $8.6 million compared with $13.8 million recorded at the end of the previous quarter. The company had a long-term debt of $314.5 million compared with $303 million at the end of the prior quarter.

The company generated around $5 million of cash from operating activities and capex was $3.6 million. ICF paid out dividends of $2.6 million in the quarter.

2021 Guidance

ICF expects non-GAAP earnings per share in the range of $4.35-$4.65. Revenues are projected in the range of $1.525-$1.575 billion. EBITDA is expected to be in the range of $145 million and $155 million. Operating cash flow is anticipated to be approximately $100 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

At this time, ICF has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, ICF has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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