ICON Plc (ICLR, $286.20): “A Global ICON”
By: Grace
Schwartz, AIM Student at Marquette University
Summary
• ICON plc. (NYSE:ICLR) is a global clinical research organization
that specializes in strategic development, consulting, and commercialization
services to biotechnology, pharmaceutical, and medical device industries. ICON
is headquartered in Dublin, Ireland and was founded in 1990.
• ICON’s current revenues come
from Ireland (42.2%), the United States (33.1%), China (4%), and remaining
amounts from Germany, the United Kingdom, France, Italy, and Japan.
• ICLR recently acquired PRA
Health Sciences, one of the world’s leading global contract research
organizations. This company will combine with ICON to provide clinical
development, drug development, and data solution services to the pharmaceutical
and biotech industries.
• The company still holds the
2023 goal of 2.5 times adjusted EBITDA. Strong cash flow backs this
expectation.
• ICLR was added to the AIM
portfolio on April 12, 2013, at a price of $30.66. It is currently trading at $286.20,
showing an 833.46% increase from its initial purchase.
Key points: ICON released its Q3 2021 Results on November 4, 2021. The company increased revenue by 25% compared to $701.1 million Q3 2020 revenue. Due to this strong performance, management increased 2021 outlook up to $5.53 billion, a 1.5% increase from expected revenue.
One key strength of increased
revenue came from customer diversification and balanced representation across
customer segments. This is likely due to the successful acquisition of PRA
Health Sciences. This merger allowed ICON to reach a broader customer base and
increase revenue.
ICON also expanded their
partnership with Deep Lens. Deep Lens is a digital healthcare company that uses
analytics to match patients with suitable clinical trials and precision
therapies. This use of analytics will accelerate clinical trial enrollment,
especially in the oncology realm.
What
has the stock done lately?
Over the past 3 months, ICLR has
seen a change of 16.27%. For the majority of the 3 months, the stock was
trading between $256.77-$270.17. However, the company saw a 7.4% stock increase
following an impressive Q3 earnings report released on November 6th.
During this call the company announced a 3.8% increase in projected earnings
per share, to a $9.55-$9.75 range.
Past
Year Performance: ICLR stock has increased 50.89% in value over the
past year. The company attributes the tremendous growth this year to customer
diversification and an increase in investments in technology and innovation.
Additionally, the company’s successful acquisition of PRA Health Sciences has
increased investor outlook and allowed for increased engagement with new
customers. Q3 2021 was the first quarter reported as a combined company.
1 Year Stock Chart vs. Benchmark from FactSet here
My
Takeaway
ICON
Plc has performed extremely well this past year and its recent earnings call
and quarter reports project this to continue. Nearly every year since 2000,
ICON has acquired new companies. This has strongly improved data analytics and
customer base and allowed the company to increase market share. Additionally,
the market for clinical trials continues to increase, and ICON has shown to be
a trusted partner for clinical development. The recent acquisition of PRA
Health Sciences only drives these numbers higher, as the company has moved past
the transitional phase. ICON’s
management believes the company will continue to be successful, so much that
they increased projected EPS 3.8%. For these reasons, it is recommended that
ICON Plc remain in the AIM International Equity fund for the time being.
1 Month Stock Chart from FactSet here
