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ICF International Benefits From Global Presence, Buyouts

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Shares of ICF International, Inc. (ICFI - Free Report) have gained 35.3% year to date, significantly outperforming the 5.3% rise of the industry it belongs to. Both government and commercial businesses remain in good shape, courtesy of improvement in business development pipeline and win rates.

ICF’s first-quarter 2018 non-GAAP earnings per share of 77 cents surpassed the Zacks Consensus Estimate by 2 cents and improved 11.6% year over year. Revenues of $302.8 million were up 2.2% on a year-over-year basis but lagged the consensus mark by $2 million. Service revenues totaled $223.9 million, up 1.9% year over year.

The company’s earnings surprise history has been impressive. It exceeded estimates in two of the trailing four quarters and matched the same on other two occasions with an average beat of 1.6%. For the second quarter, the consensus estimate remained unchanged over the past 30 days.

Strong Global Presence

A solid international footprint and a robust, long-term relationship with its clients are driving ICF’s sales. Overseas, the company serves a diverse set of markets including energy, environment, infrastructure, health, education, safety and security, consumer, technology, e-commerce, transport and financial markets. This has helped it improve its knowledge base and functional expertise as well as strengthen client relationships over time.

In the first quarter, International government revenues of $28.8 million contributed 10% to total revenues and improved 7% year over year.

ICF International, Inc. Revenue (TTM)

Acquisition — Key Growth Strategy

Strategic acquisitions aided ICF to enhance its subject matter knowledge, expand offerings and provide scale in particular geographies.

The recent buyout 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 transaction has extended ICF’s loyalty business to Europe, Trade NTE boosted its branding services through existing involvements with clients.

The company continues to explore acquisition opportunities to gain new clients, increase presence in potential markets and strengthen its portfolio of services.

Zacks Rank and Other Key Picks

ICF has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some other top-ranked stocks in the broader Business Services sector are Automatic Data Processing, Inc. (ADP - Free Report) , The Dun & Bradstreet Corporation (DNB - Free Report) and FLEETCOR Technologies, Inc. (FLT - Free Report) . While Automatic Data Processing and Dun & Bradstreet sport a Zacks Rank #1, FLEETCOR holds a Zacks Rank of 2.

The expected long-term earnings per share (three to five years) growth rate for Automatic Data Processing, Dun & Bradstreet Corporation and FLEETCOR Technologies is 11.3%, 6% and 16.5%, respectively.

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