ICF International (ICFI) Stock Rises 11% in a Year: Here's How

Zacks Equity Research

March 24, 2023 at 11:49 AM·3 min read

ICF International, Inc. ICFI has had an impressive run over the past year.

The stock has gained 10.8% compared with the 2.4% rally of the industry it belongs to and against the 14.1% decline of the Zacks S&P 500 composite.

ICF International, Inc. Price

ICF International, Inc. price | ICF International, Inc. Quote

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 is driving the 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 1.32 trailing 12-month book-to-bill ratio and an $8.5 billion new business pipeline at the end of the fourth quarter of 2022 provide good revenue visibility for the near term.

Strategic acquisitions have helped 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 growth of ICF’s EBITDA and free cash flow.

ICF’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, delivering an average earnings surprise of 9.2%.

Some Risks

ICF is seeing an escalation in costs. The company’s operating costs and expenses increased 16% in 2022. These expenses rose 3.9% year over year in 2021 and 5.1% in 2020.

Zacks Rank and Other Stocks to Consider

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

Here are a few other top-ranked stocks from the broader Business Services sector, which can be a good investment opportunity.

Omnicom Group's OMC internal development initiatives and shareholder-friendly policies ensure long-term profitability. The Zacks Consensus Estimate for the company’s first-quarter 2023 earnings is pegged at $1.40, which has been revised 1.4% downward in the past 60 days. For first-quarter 2023, OMC’s earnings are expected to grow slightly from the year-ago reported figure to $1.40. The company has beaten the Zacks Consensus Estimate in all the four trailing quarters, with an average surprise of 8%. The company currently sports a Zacks Rank #1.

Gartner IT is being aided by the diverse addressable market with low customer concentration. The Zacks Consensus Estimate for the company’s first-quarter 2023 earnings is pegged at $2.04, which has been revised 3.6% upward in the past 60 days. For first-quarter 2023, ICFI’s earnings are expected to register a 12.5% fall on a year-over-year basis. The company has beaten the Zacks Consensus Estimate in all the four trailing quarters, with an average surprise of 32.7%. The company currently carries a Zacks Rank #2 (Buy).

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