Wednesday, December 15, 2021

An International Equity holding: ICON Plc (ICLR, $286.20): “A Global ICON” By: Grace Schwartz, AIM Student at Marquette University

 ICON Plc (ICLR, $286.20): “A Global ICON”

By: Grace Schwartz, AIM Student at Marquette University

Disclosure: The AIM Equity Fund currently holds this position. This article was written by myself, and it expresses my own opinions. I am not receiving compensation for it and I have no business relationship with any company whose stock is mentioned in this article.


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

Source: FactSet

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

Source: FactSet