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Reasons to Hold on to ICF International (ICFI) Stock For Now

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ICF International, Inc. (ICFI - Free Report) has an impressive Growth Score of A. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth. The company’s earnings for 2021 and 2022 are expected to improve 15.4% and 8%, respectively, year over year.

Shares have returned 36.2% over the past year, significantly outperforming the 23.8% growth of the Zacks S&P composite.

What’s Behind the Rally?

ICF continues to witness revenue growth from government and commercial energy clients, driven by successful business retention and new business development. Efficient execution of existing contracts and higher utilization are expected to drive operating leverage for the company going forward. The recent acquisition of Creative is expected to help ICFI maintain a revenue growth rate in the mid-teens in 2022. It is anticipated to be slightly accretive to ICF's GAAP EPS in 2022.

ICF’s total debt to total capital ratio was 0.26 at the end of third-quarter 2021 compared with 0.3 at the end of the previous quarter. Decreasing debt-to-capitalization ratio indicates that the proportion of debt to finance the company’s assets is decreasing, and so is the risk of insolvency. Further, cash and cash equivalent balance of $42 million at the end of the quarter was far above its current debt level of $10 million.

Some Risks

ICF sees an escalation in costs as it is making significant investments in internal infrastructure and acquisitions. The company’s operating costs and expenses increased 5.1% in 2020. These expenses rose 9.2% year over year in 2019 and 3.5% in 2018.

Zacks Rank and Stocks to Consider

ICFI currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Investor interested in the broader Zacks Business Services sector can consider stocks like Avis Budget (CAR - Free Report) , Cross Country Healthcare (CCRN - Free Report)  and Accenture (ACN - Free Report) .

Avis Budget has an expected revenue growth rate of around 69.8% for the current year. CAR has a trailing four-quarter earnings surprise of 76.9%, on average.

Avis Budget’s shares have surged 405.6% in the past year. It has a long-term earnings growth of 19.4%. CAR sports a Zacks #1 Rank.

Cross Country Healthcare has an expected revenue growth rate of around 94% for the current fiscal year. CCRN has a trailing four-quarter earnings surprise of 75%, on average.

Cross Country Healthcare’s shares have surged 188% in the past year. It has a long-term earnings growth of 21.5%. CCRN sport a Zacks #1 Rank.

Accenture has an expected revenue growth rate of around 18.4% for the current year. It has a trailing four-quarter earnings surprise of 5.3%, on average.

Accenture’s shares have surged 42.4% in the past year. It has a long-term earnings growth of 10%. ACN carries a Zacks #1 Rank.