ICF International, Inc. (ICFI) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of ICF International (ICFI)? Shares have been on the move with the stock up 12.4% over the past month. The stock hit a new 52-week high of $131.05 in the previous session. ICF International has gained 31.4% since the start of the year compared to the 9.7% move for the Zacks Business Services sector and the 16.9% return for the Zacks Government Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 3, 2023, ICF reported EPS of $1.57 versus consensus estimate of $1.42 while it beat the consensus revenue estimate by 3.73%.
For the current fiscal year, ICF is expected to post earnings of $6.28 per share on $1.97 billion in revenues. This represents an 8.84% change in EPS on a 10.75% change in revenues. For the next fiscal year, the company is expected to earn $7.02 per share on $2.13 billion in revenues. This represents a year-over-year change of 11.84% and 8.04%, respectively.
Valuation Metrics
ICF may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
ICF has a Value Score of B. The stock's Growth and Momentum Scores are C and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 20.7X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.7X. On a trailing cash flow basis, the stock currently trades at 15.2X versus its peer group's average of 15.2X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, ICF currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if ICF passes the test. Thus, it seems as though ICF shares could still be poised for more gains ahead.
How Does ICFI Stack Up to the Competition?
Shares of ICFI have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Booz Allen Hamilton Holding Corporation (BAH). BAH has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of C, and a Momentum Score of A.
Earnings were strong last quarter. Booz Allen Hamilton Holding Corporation beat our consensus estimate by 17.60%, and for the current fiscal year, BAH is expected to post earnings of $5.04 per share on revenue of $10.33 billion.
Shares of Booz Allen Hamilton Holding Corporation have gained 8.3% over the past month, and currently trade at a forward P/E of 24.14X and a P/CF of 20.75X.
The Government Services industry is in the top 8% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ICFI and BAH, even beyond their own solid fundamental situation.
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