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Here's Why You Should Bet on ICF International (ICFI) Stock

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A wise investment decision involves buying well-performing stocks at the right time while selling those that are at risk. A rise in share price and strong fundamentals signal a stock’s bullish run.

ICF International, Inc. (ICFI - Free Report) is a government services stock that has performed extremely well over the past year and has the potential to carry the momentum in the near term. Therefore, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.

Let’s take a look at the factors that make the stock an attractive pick.

Share Price Performance

A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse over the past year. ICF has returned a massive 57.9% compared with the industry’s increase of 12.1%.

Solid Rank

ICF has a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer the attractive investment opportunities for investors. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions

Two estimates for 2018 moved north over the past 60 days versus one southward revision, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for 2018 climbed 0.5%.

Positive Earnings Surprise History

ICF has a decent earnings surprise history. The company outpaced the Zacks Consensus Estimate in two of the trailing four quarters and matched the consensus mark on other two occasions, delivering an average positive earnings surprise of 23.1%.

Solid Growth Prospects

The Zacks Consensus Estimate for 2018 earnings of $3.72 reflects a year-over-year improvement of 23.2%. For 2019, the bottom line is expected to register 8.1% growth. ICF has an expected long-term earnings growth rate of 10%.

Key Growth Drivers

ICF has a strong global presence with more than 69 regional offices across the United States and over 23 offices outside the country. It serves a diverse set of markets including energy, environment, infrastructure; health, education, safety and security, consumer, technology, e-commerce, transport and financial markets. This, in turn, has helped the company to improve its knowledge base and functional expertise over time.

The company has multi-year relationships with several other government and commercial clients as well. Global presence and diversity of markets ensures diversified and consistent revenue growth for ICF.

ICF International, Inc. Revenue (TTM)

Furthermore, acquisition is a key growth strategy of ICF. Acquisition 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 buyout has extended ICF’s loyalty business to Europe, Trade NTE boosted its branding services through existing involvements with clients.

Overall, strategic acquisitions helped ICF to enhance its subject matter knowledge, expand offerings and provide scale in particular geographies. Meanwhile, the company continues to explore acquisition opportunities to gain new clients, increase presence in potential markets and strengthen its portfolio of services.

Currently, ICF is banking on opportunities emerging from the bipartisan budget agreement. The 2018 budget by the Department of Health and Human Services — ICF’s largest federal client — has increased 14%. In fact, both the Centers for Disease Control and the National Institutes of Health, where ICF has significant exposure, have received increased funding.

Also, considerable amount of funding is being allocated for initiatives to prevent opioid abuse, an area in which ICF has significant expertise. Additionally, the company sees a lot of opportunities at the Department of Transportation, Energy, Homeland, Security and Defense. In the coming months, ICF expects RFPs to be issued in connection to these increased budget dollars.

Other Stocks to Consider

Some other top-ranked stocks worth considering in the broader Business Services sector include Mastercard Incorporated (MA - Free Report) , FLEETCOR Technologies, Inc. (FLT - Free Report) and WEX Inc. (WEX - Free Report) . While WEX and FLEETCOR Technologies currently carry a Zacks Rank #2, Mastercard sports a Zacks Rank #1.

The long-term expected earnings per share growth rate for Mastercard, FLEETCOR Technologies and WEX is 19%, 16.5% and 14.3%, respectively.

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