Earnings Beat: ICON Public Limited Company Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
Investors in ICON Public Limited Company (NASDAQ:ICLR) had a good week, as its shares rose 8.7% to close at US$314 following the release of its yearly results. ICON reported US$8.1b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$7.40 beat expectations, being 9.0% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on ICON after the latest results.
Check out our latest analysis for ICON
After the latest results, the 13 analysts covering ICON are now predicting revenues of US$8.64b in 2024. If met, this would reflect a credible 6.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 24% to US$9.24. Before this earnings report, the analysts had been forecasting revenues of US$8.67b and earnings per share (EPS) of US$9.30 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 13% to US$349. It looks as though they previously had some doubts over whether the business would live up to their expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic ICON analyst has a price target of US$385 per share, while the most pessimistic values it at US$243. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that ICON's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.4% growth on an annualised basis. This is compared to a historical growth rate of 29% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.1% annually. So it's pretty clear that, while ICON's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on ICON. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for ICON going out to 2026, and you can see them free on our platform here..
It might also be worth considering whether ICON's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
