A month has gone by since the last earnings report for ICF International (ICFI Quick QuoteICFI - Free Report) . Shares have added about 1.3% in that time frame, outperforming the S&P 500.

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

ICF International Reports Q2 Earnings Beat

ICF International delivered mixed second-quarter 2022 results wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. 

The stock has gained 5.9% since the earnings release on Aug 3, as ICFI’s guidance for 2022 was strong. Revenues are now projected in the range of $1.760-$1.820 billion (prior view: $1.7-$1.76 billion). The midpoint ($1.79 billion) of the guidance is higher than the current Zacks Consensus Estimate of 1.75 billion.  ICF expects 2022 non-GAAP earnings per share to be $5.50-$5.80 (prior view: $5.15-$5.45). The midpoint of the guidance ($5.65) is above the current Zacks Consensus Estimate of $5.53.

Non-GAAP earnings (excluding 36 cents from non-recurring items) of $1.33 per share surpassed the Zacks Consensus Estimate by 2.3% and rose 11.8% on a year over year basis. However, revenues of $423.1 million missed the consensus mark by 1.5% but climbed 7.8% year over year owing to rising service revenues (up 9% year over year).  

Revenues in Detail

Revenues from government clients came in at $316.4 million, up 13.9% on a year-over-year basis. The U.S. federal government revenues of $225.2 million increased 23.6% year over year and contributed 53% to total revenues.

The U.S. state and local government revenues of $64.1 million moved up 9.5% year over year and contributed 15% to total revenues.

International government revenues of $27.1 million were down 27% year over year, contributing 7% to total revenues.

Commercial revenues totaled $106.7 million, down 7% from the year-ago quarter’s figure and contributed 25% to total revenues. Energy markets and marketing services contributed 62% and 27%, respectively, to commercial revenues.

Backlog and Value of Contracts

Total backlog and funded backlog amounted to $3.2 billion and $1.5 billion at the end of the quarter, respectively. The total value of contracts awarded in the first quarter of 2022 came in at $346.1 million for a quarterly book-to-bill ratio of 1.21.

Operational Results

Adjusted EBITDA of $44.1 million rose 10% from the year-ago quarter’s figure. Adjusted EBITDA margin on revenues of 10.4% increased 20 basis points (bps) year over year. Adjusted EBITDA margin on service revenues was 14.4%, up 20 bps year over year.

Balance Sheet

ICF exited the second quarter with a cash and cash equivalent balance of $6.1 million compared with $7.4 million recorded at the end of the previous quarter. ICFI had a long-term debt of $435.1 million compared with $449.7 million at the end of the prior quarter.

ICFI used $13.4 million cash from operating activities, while capex was $4.55 million. ICF paid out dividends of $2.64 million in the quarter.

Dividend

On Aug 3, 2022, ICF declared a quarterly cash dividend of 14 cents per share, to be paid out on Oct 13 to its stockholders of record as of Sep 9.

2022 Guidance

Service revenues are expected in the band of $1.275-$1.325 billion (prior view: $1.225-$1.275 billion).

Adjusted EBITDA is expected between $186 million and $198 million (prior view: $168 million and $180 million). Operating cash flow is expected to increase to $140 million in 2022.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, ICF has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

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

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise ICF has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

ICF is part of the Zacks Government Services industry. Over the past month, Booz Allen Hamilton (BAH Quick QuoteBAH - Free Report) , a stock from the same industry, has gained 1.3%. The company reported its results for the quarter ended June 2022 more than a month ago.

Booz Allen reported revenues of $2.25 billion in the last reported quarter, representing a year-over-year change of +13.1%. EPS of $1.13 for the same period compares with $1.07 a year ago.

For the current quarter, Booz Allen is expected to post earnings of $1.13 per share, indicating a change of -10.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.6% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Booz Allen. Also, the stock has a VGM Score of C.