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Here’s Why You Should Hold ICF International (ICFI) Stock


ICF International, Inc. ICFI is currently benefiting from strong global presence and acquisitions, that are helping the company to expand offerings and gain new clients.

Shares of the company have rallied 28.7% in the past year, outperforming the 18.6% rise of its industry.

With an expected long-term earnings per share growth rate of 10% and a market cap of $1.3 billion, ICF seems to be a stock that investors should retain in their portfolio for now.

Factors Driving ICF’s Performance

ICF has a strong global presence and serves a diverse set of markets including energy, environment, infrastructure; health, education, safety and security, consumer, technology, e-commerce, transport and financial markets. This enables the company to constantly improve knowledge base and functional expertise. Also, ICF has been successful in establishing and maintaining strong, long-term relationship with its clients.

In fact, it has advised the U.S. Environmental Protection Agency (“EPA”) and HHS for more than 30 years, the U.S. Department of Energy (“DOE”) for more than 25 years, DoD for more than 20 years, the European Commission for more than 15 years and certain commercial clients in energy markets for more than 20 years. The company has multi-year relationships with several other government and commercial clients as well. Global presence and diversity of markets ensures diversified and consistent revenue growth for ICF.

ICF International, Inc. Revenue (TTM)

ICF continues to witness contract wins and growth in its business development pipeline — a significant portion of which is represented by disaster recovery. Also, it is experiencing solid improvement in international government work and stable revenue growth from federal, state and local government clients. ICF looks well poised for additional contract wins in the federal government market because of the raised fiscal 2018 and 2019 civilian agency budgets, approved earlier this year.

ICF has made two acquisitions so far in 2018, We are Vista and DMS Disaster Consultants. While We are Vista is expected to strength the company’s global marketing, technology, communications and digital services portfolio, DMS should improve its disaster response, recovery and preparedness offerings.

Summing Up

Despite riding on significant growth prospects, ICF is not free from overhangs. The company could see escalation in costs as it is making significant investments in capture and proposal activities, infrastructure and intellectual property development, loyalty program and acquisitions. Moreover, as the company has expanded its work with commercial clients, considerable variations in revenues and profits are expected from time to time with ups and downs in the global economy. Nevertheless, we believe that presence in diverse markets, robust and long-term relationship with its clients and acquisitions bode well for ICF.

Other Stocks to Consider

Currently, ICF is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A few better-ranked stocks in the Zacks Business Services sector are WEX Inc WEX, Total System Services, Inc TSS and The Interpublic Group of Companies, Inc. IPG, each carrying a Zacks Rank #2.

The long-term expected EPS (three to five years) growth rate for WEX, Total System Services and Interpublic Group is 15%, 14.2%, and 7.4%, respectively.

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