On Tuesday, Truist Securities maintained a Hold rating on ICF International (NASDAQ:ICFI) with a consistent price target of $140. Trading near its 52-week low of $117.69, InvestingPro data shows the stock is currently fairly valued at $118.90.
The firm anticipates that ICF International, with its current market cap of $2.23 billion, is poised to secure contracts for disaster recovery and mitigation in the second half of 2025, which could contribute to a growth of 1-2 percentage points in 2026. These contracts are expected to arise in Florida, the Carolinas, and potentially in Georgia and Virginia, following recent storms in these areas.
According to Truist Securities, local governments typically hire an outsourced program manager to oversee the compliance with federal fund distribution at a local level. The revenue potential for these outsourced providers ranges from 5-10% of the total funds allocated for disaster recovery efforts.
With trailing twelve-month revenue of $2 billion and a strong Piotroski Score of 8, InvestingPro analysis reveals ICF's robust financial health and operational efficiency. For deeper insights into ICF's financial metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
The analyst highlighted that the appropriations include $12 billion for the Community Development Block Grant (CDBG) Disaster Recovery program. This initiative is designed to assist local, state, and Tribal governments in recovering from disasters that have been declared by the President. ICF International, recognized as a market leader in this area, is expected to benefit from this funding, specifically for the Community Development Block Grant residential reconstruction programs.
Drawing from historical performance, the firm noted that ICF International has a proven track record in managing large-scale disaster recovery programs. Nearly two decades ago, ICF was awarded The Road Home contract, which was responsible for the reconstruction of homes in Louisiana after Hurricane Katrina. The contract resulted in $900 million in sales for ICF International over a three-year period, showcasing the company's capability and experience in handling substantial recovery operations.
With a current PEG ratio of 0.38 and net income of $107.77 million, the company maintains its profitable trajectory while trading at attractive valuations relative to its growth potential.
In other recent news, ICF International has secured over $40 million in contracts to support the National Institutes of Health (NIH) with advanced technology initiatives.
These contracts, awarded recently, include a new $11 million agreement to assist the National Library of Medicine and nearly $20 million in contracts aimed at modernizing biomedical and cancer research data systems. The company has also entered a $11 million agreement with Banyan Communications to offer communication and digital engagement services.
Furthermore, ICF International expanded its share repurchase program, raising the total authorization to $300 million. This follows the company's solid Q3 growth, with a 6% year-on-year increase in revenue from continuing operations, which rose to 10% after considering pass-throughs. The company also raised its full-year EPS guidance by $0.35, now ranging from $6.05 to $6.15.
During its recent earnings call, ICF International reported a third-quarter revenue of $517 million, a 3.1% increase from the previous year. The company's adjusted EBITDA grew to $58.5 million, and net income rose to $32.7 million.
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