Icon PLC Stock Downgraded (ICLR)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- Icon (Nasdaq:ICLR) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

• EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:

• The revenue growth came in higher than the industry average of 5.4%. Since the same quarter one year prior, revenues rose by 18.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
• The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Life Sciences Tools & Services industry. The net income increased by 766.1% when compared to the same quarter one year prior, rising from -$2.66 million to $17.74 million.
• Powered by its strong earnings growth of 825.00% and other important driving factors, this stock has surged by 43.60% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
• ICON PLC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ICON PLC reported lower earnings of $0.38 versus $1.44 in the prior year. This year, the market expects an improvement in earnings ($0.96 versus $0.38).
• The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Life Sciences Tools & Services industry and the overall market, ICON PLC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

.

ICON Public Limited Company, a contract research organization, provides outsourced development services to the pharmaceutical, biotechnology, and medical device industries in Ireland, the United States, and rest of Europe. The company has a P/E ratio of 63.6, above the S&P 500 P/E ratio of 17.7. Icon has a market cap of $1.4 billion and is part of the health care sector and health services industry. Shares are up 37.6% year to date as of the close of trading on Friday.

You can view the full Icon Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

FREE for a limited time only: Get TheStreet Ratings #1 Stock Report NOW!.

 

For more information on Icon PLC click any of the following:

• Icon PLC Stock Price

• Icon PLC Analyst Ratings

• Icon PLC Key Stats & Profile

• Icon PLC Earnings

• Icon PLC Ratio Comparison

• Icon PLC Growth Rates

• Icon PLC Balance Sheet

• Icon PLC Cash Flow

• Icon PLC Income Statement