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ICON (ICLR) Up 7.6% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Icon PLC (ICLR - Free Report) . Shares have added about 7.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ICON due for a pullback? 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.
ICON delivered fourth-quarter 2023 adjusted earnings per share of $3.46, an increase of 10.5% from the year-ago period’s figure. The metric surpassed the Zacks Consensus Estimate by 0.6%.
For the full year, adjusted earnings were $12.79 per share, down 8.9% from the year-ago period’s levels. The metric beat the Zacks Consensus Estimate by 0.2%.
Revenues
Total revenues in the fourth quarter rose 5.3% year over year to $2.07 billion. The metric missed the Zacks Consensus Estimate by 0.9%.
Gross business wins in the fourth quarter were $2.99 billion and cancellations were $461 million. This resulted in net business wins of $2.53 billion and a book-to-bill of 1.22.
Total revenues for 2023 were $8.12 billion, reflecting a 4.9% rise from the year-ago period. The figure missed the Zacks Consensus Estimate by 0.2%.
Margins
The gross profit in the fourth quarter increased 6.7% year over year to $6.20 billion. Meanwhile, the gross margin expanded 40 basis points (bps) year over year to 30%.
During the quarter, Selling, general and administrative expenses fell 13.8%.
The adjusted operating income in the quarter under review was $1.95 billion, highlighting a decrease of 13.8%. The adjusted operating margin expanded 249 bps to 20.6%.
Cash Position
ICON exited 2023 with cash and cash equivalents of $378.1 million compared with $288.8 million at the end of 2022. The company ended 2023 with no debt on its balance sheet.
Cumulative cash flow provided by operating activities at the end of 2023 was $1.16 billion compared to $563 million in the prior year’s comparable period.
Guidance
The company is re-affirming full-year 2024 financial guidance:
Full-year 2024 revenues are expected in the range of $8.40-$8.80 billion, suggesting growth of 3.4-8.4%. The Zacks Consensus Estimate for the same is pegged at $8.63 billion.
Full-year 2024 adjusted earnings per share are expected to be in the range of $14.50-$15.30, calling for growth of 13.4-19.6%. The Zacks Consensus Estimate for the same is pegged at $14.85.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, ICON has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. It comes with little surprise ICON 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
ICON is part of the Zacks Medical Services industry. Over the past month, Pediatrix Medical Group (MD - Free Report) , a stock from the same industry, has gained 9%. The company reported its results for the quarter ended December 2023 more than a month ago.
Pediatrix Medical Group, Inc. reported revenues of $496.44 million in the last reported quarter, representing a year-over-year change of -3.4%. EPS of $0.32 for the same period compares with $0.47 a year ago.
Pediatrix Medical Group, Inc. is expected to post earnings of $0.18 per share for the current quarter, representing a year-over-year change of -21.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -17.6%.
Pediatrix Medical Group, Inc. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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ICON (ICLR) Up 7.6% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Icon PLC (ICLR - Free Report) . Shares have added about 7.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ICON due for a pullback? 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.
ICON Q4 Earnings Surpass Estimates, Margins Expand
ICON delivered fourth-quarter 2023 adjusted earnings per share of $3.46, an increase of 10.5% from the year-ago period’s figure. The metric surpassed the Zacks Consensus Estimate by 0.6%.
For the full year, adjusted earnings were $12.79 per share, down 8.9% from the year-ago period’s levels. The metric beat the Zacks Consensus Estimate by 0.2%.
Revenues
Total revenues in the fourth quarter rose 5.3% year over year to $2.07 billion. The metric missed the Zacks Consensus Estimate by 0.9%.
Gross business wins in the fourth quarter were $2.99 billion and cancellations were $461 million. This resulted in net business wins of $2.53 billion and a book-to-bill of 1.22.
Total revenues for 2023 were $8.12 billion, reflecting a 4.9% rise from the year-ago period. The figure missed the Zacks Consensus Estimate by 0.2%.
Margins
The gross profit in the fourth quarter increased 6.7% year over year to $6.20 billion. Meanwhile, the gross margin expanded 40 basis points (bps) year over year to 30%.
During the quarter, Selling, general and administrative expenses fell 13.8%.
The adjusted operating income in the quarter under review was $1.95 billion, highlighting a decrease of 13.8%. The adjusted operating margin expanded 249 bps to 20.6%.
Cash Position
ICON exited 2023 with cash and cash equivalents of $378.1 million compared with $288.8 million at the end of 2022. The company ended 2023 with no debt on its balance sheet.
Cumulative cash flow provided by operating activities at the end of 2023 was $1.16 billion compared to $563 million in the prior year’s comparable period.
Guidance
The company is re-affirming full-year 2024 financial guidance:
Full-year 2024 revenues are expected in the range of $8.40-$8.80 billion, suggesting growth of 3.4-8.4%. The Zacks Consensus Estimate for the same is pegged at $8.63 billion.
Full-year 2024 adjusted earnings per share are expected to be in the range of $14.50-$15.30, calling for growth of 13.4-19.6%. The Zacks Consensus Estimate for the same is pegged at $14.85.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, ICON has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. It comes with little surprise ICON 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
ICON is part of the Zacks Medical Services industry. Over the past month, Pediatrix Medical Group (MD - Free Report) , a stock from the same industry, has gained 9%. The company reported its results for the quarter ended December 2023 more than a month ago.
Pediatrix Medical Group, Inc. reported revenues of $496.44 million in the last reported quarter, representing a year-over-year change of -3.4%. EPS of $0.32 for the same period compares with $0.47 a year ago.
Pediatrix Medical Group, Inc. is expected to post earnings of $0.18 per share for the current quarter, representing a year-over-year change of -21.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -17.6%.
Pediatrix Medical Group, Inc. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.