ICF (ICFI) Down 17.1% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for ICF International (ICFI). Shares have lost about 17.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is ICF due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

ICF International Misses Q4 Earnings

ICF InternationalNon-GAAP EPS of $1.18 lagged the consensus mark by 4.8% but improved 0.9% on a year-over-year basis. Revenues of $396.6 million missed the consensus mark by 1.4% but increased 4.9% year over year.

Revenues in Detail

Revenues from government clients came in at $244.3 million and improved 7.6% year over year. U.S. federal government revenues of $139.7 million increased 5.5% year over year and contributed 35% to total revenues. U.S. state and local government revenues of $69 million rose 10.9% year over year and contributed 18% to total revenues. International government revenues of $35.6 million, up 10% year over year, contributed 9% to total revenues. Commercial revenues totaled $152.4 million, up 1% from the year-ago quarter’s figure and contributed 38% to total revenues. Energy markets contributed 39% to commercial revenues and Marketing services contributed 54% to the same.

Backlog and Value of Contracts

Total backlog and funded backlog amounted to $2.4 billion and $1.3 billion at the end of the quarter, respectively. The total value of contracts awarded was $353.3 million.

Operational Results

Adjusted EBITDA was $37.4 million, down 5.1% from the year-ago quarter’s figure. Adjusted EBITDA margin of 9.4% was down 100 basis points (bps) year over year. Adjusted EBITDA margin on service revenues was 14.9%, down 160 bps year over year.

Balance Sheet

ICF International exited fourth-quarter 2019 with cash and cash equivalent balance of $6.48 million compared with $7.45 million at the end of the previous quarter. The company had a long-term debt of $165.44 million compared with $245 million at the end of the prior quarter. The company generated $85.1 million of cash from operating activities and capex was $6.2 million. The company paid out dividends of $2.6 million in the reported quarter. On Feb 27, 2020, the company declared a quarterly dividend of 14 cents per share, payable on Apr 13, 2020 to shareholders of record on Mar 27, 2020.

2020 Outlook

Management expects total revenues between $1.60 billion and $1.65 billion. Non-GAAP EPS is expected in the range of $4.00 to $4.30. EBITDA is expected to be $145-$155 million. Operating cash flow is anticipated to be around $120 million.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -14.03% due to these changes.

VGM Scores

Currently, ICF has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

ICF has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.