Investors in ICF International, Inc. (NASDAQ:ICFI) had a good week, as its shares rose 6.6% to close at US$69.71 following the release of its quarterly results. Revenues were US$360m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.94 were also better than expected, beating analyst predictions by 20%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for ICF International from six analysts is for revenues of US$1.58b in 2021 which, if met, would be a reasonable 7.8% increase on its sales over the past 12 months. Per-share earnings are expected to climb 12% to US$3.66. In the lead-up to this report, the analysts had been modelling revenues of US$1.59b and earnings per share (EPS) of US$3.65 in 2021. 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.
There were no changes to revenue or earnings estimates or the price target of US$91.40, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on ICF International, with the most bullish analyst valuing it at US$108 and the most bearish at US$80.00 per share. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ICF International's past performance and to peers in the same industry. The analysts are definitely expecting ICF International's growth to accelerate, with the forecast 7.8% growth ranking favourably alongside historical growth of 6.4% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 8.0% per year. ICF International is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
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. The consensus price target held steady at US$91.40, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple ICF International analysts - going out to 2023, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for ICF International that you should be aware of.
This article by Simply Wall St is general in nature. 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.
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