There's been a notable change in appetite for ICF International, Inc. (NASDAQ:ICFI) shares in the week since its annual report, with the stock down 11% to US$76.26. It looks like the results were a bit of a negative overall. While revenues of US$1.5b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.7% to hit US$3.59 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Following the latest results, ICF International's four analysts are now forecasting revenues of US$1.62b in 2020. This would be a solid 9.8% improvement in sales compared to the last 12 months. Statutory per share are forecast to be US$3.70, approximately in line with the last 12 months. Before this earnings report, analysts had been forecasting revenues of US$1.63b and earnings per share (EPS) of US$4.11 in 2020. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.
The consensus price target held steady at US$98.83, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values ICF International at US$110 per share, while the most bearish prices it at US$88.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that ICF International's rate of growth is expected to accelerate meaningfully, with forecast 9.8% revenue growth noticeably faster than its historical growth of 6.1%p.a. over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 5.8% next year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect ICF International to grow faster than the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that ICF International's revenues are expected to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple ICF International analysts - going out to 2022, and you can see them free on our platform here.
It might also be worth considering whether ICF International's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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