ICON's Intrinsic Value Estimated at $278, 33% Undervalued by Current Share Price

ICON Public Limited Company's (NASDAQ:ICLR) intrinsic value estimate is US$278, suggesting it is 33% undervalued based on the current share price of US$187. The US$213 analyst price target is 23% less than the estimated fair value. The calculation uses a 2-stage discounted cash flow model, projecting future cash flows and discounting them to today's value.

Icon Public Limited Company (NASDAQ: ICLR) recently reported its second-quarter earnings, with shares trading at a price of US$187. The company's earnings per share (EPS) for the quarter ended June 2025 were $3.26, surpassing the Zacks Consensus Estimate of $3.18 per share [1]. This marks the third consecutive quarter in which Icon PLC has beaten consensus EPS estimates.

Revenue for the quarter was $2.02 billion, exceeding the Zacks Consensus Estimate by 1.57% and representing a year-over-year decrease of 4.2%. The company's stock has lost about 23% of its value since the beginning of the year, compared to the S&P 500's gain of 7.3%.

An intrinsic value estimate of US$278 suggests that Icon PLC is undervalued by 33% based on its current share price. This estimate was derived using a 2-stage discounted cash flow model, projecting future cash flows and discounting them to today's value. The analyst price target of US$213 is 23% less than the estimated fair value [1].

Icon PLC's earnings surprise of +2.52% this quarter and the previous quarter's surprise of +3.57% have not been sufficient to drive the stock's performance in line with the broader market. The company's near-term performance will likely depend on management's commentary on the earnings call and future earnings expectations.

The Zacks Rank for Icon PLC is currently #3 (Hold), indicating that the stock is expected to perform in line with the market in the near future. The Medical Services industry, to which Icon PLC belongs, is currently in the top 35% of the 250 plus Zacks industries, with the top 50% of industries outperforming the bottom 50% by a factor of more than 2 to 1 [1].

The outlook for Icon PLC's stock will be closely watched, particularly as the consensus EPS estimates for the coming quarters and the current fiscal year are expected to change in the days ahead. The current consensus EPS estimate is $3.36 for the coming quarter and $13.21 for the current fiscal year.

In conclusion, while Icon PLC's earnings beat estimates and the company's industry rank indicate potential for growth, the undervaluation concerns and recent stock performance suggest a cautious approach for investors. The company's future prospects will depend on its ability to meet or exceed earnings expectations and its ability to capitalize on industry trends.

References:
[1] https://finance.yahoo.com/news/icon-plc-iclr-q2-earnings-215002186.html