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ICF International (ICFI) Up 20% in the Past Year: Here's Why

Shares of ICF International, Inc. ICFI have rallied 20.4% in the past year compared with a 3.3% rise of the industry it belongs to and an 18.1% fall of the Zacks S&P 500 composite.

Reasons for the Upside

Increased government focus on environmental initiatives, efficiency and mission performance management, transparency and accountability, and heightened demand for integrating domain knowledge of client missions and programs with innovative technology-enabled solutions are driving demand for ICF’s advisory services.

The company is seeing a significant increase in revenues from its high-growth markets, which include IT modernization/digital transformation, public health, disaster management, utility consulting, climate, environment and infrastructure services. A 1.21 trailing 12-month book-to-bill ratio and an $8.7 billion new business pipeline at the end of the second quarter of 2022 provide good revenue visibility for the near term.

Strategic acquisitions have helped to reduce the company’s dependency on government spending. In addition, the acquisitions have expanded its offerings and provided scale in certain geographies. Past and future acquisitions are also expected to contribute to the growth of ICF’s EBITDA and free cash flow.

ICF International, Inc. Free Cash Flow (TTM)

 

ICF International, Inc. Free Cash Flow (TTM)
ICF International, Inc. Free Cash Flow (TTM)

ICF International, Inc. free-cash-flow-ttm | ICF International, Inc. Quote

Favorable Estimate Revisions

Driven by the above tailwinds, the Zacks Consensus Estimate for 2022 earnings has moved up 5% to $5.62 per share in the past 60 days.

Zacks Rank and Stocks to Consider

ICF currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget Group, Inc. CAR, Automatic Data Processing, Inc. ADP and CRA International, Inc. CRAI.

Avis Budget sports a Zacks Rank #1 at present. CAR has an earnings growth rate of 109.1% for 2022.

Avis Budget delivered a trailing four-quarter earnings surprise of 69.5%, on average.

Automatic Data Processing carries a Zacks Rank #2 (Buy) at present. ADP has a long-term earnings growth expectation of 12%.

ADP delivered a trailing four-quarter earnings surprise of 5%, on average.

CRA International carries a Zacks Rank of 2, currently. CRAI has a long-term earnings growth expectation of 14.3%.

CRAI delivered a trailing four-quarter earnings surprise of 26%, on average.


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