As of May 31, 2025, ICON PLC has a Discounted Cash Flow (DCF) derived fair value of $232.48 per share. With the current market price at $130.28, this represents a potential upside of 78.4%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $202.83 |
| DCF Fair Value (10-year) | $232.48 |
| Potential Upside (5-year) | 55.7% |
| Potential Upside (10-year) | 78.4% |
| Discount Rate (WACC) | 6.8% - 10.7% |
Revenue is projected to grow from $8282 million in 12-2024 to $11720 million by 12-2034, representing a compound annual growth rate of approximately 3.5%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 8282 | 2% |
| 12-2025 | 7929 | -4% |
| 12-2026 | 8372 | 6% |
| 12-2027 | 8854 | 6% |
| 12-2028 | 9114 | 3% |
| 12-2029 | 9445 | 4% |
| 12-2030 | 9842 | 4% |
| 12-2031 | 10108 | 3% |
| 12-2032 | 10545 | 4% |
| 12-2033 | 10807 | 2% |
| 12-2034 | 11720 | 8% |
Net profit margin is expected to improve from 10% in 12-2024 to 15% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 791 | 10% |
| 12-2025 | 845 | 11% |
| 12-2026 | 996 | 12% |
| 12-2027 | 1161 | 13% |
| 12-2028 | 1303 | 14% |
| 12-2029 | 1460 | 15% |
| 12-2030 | 1522 | 15% |
| 12-2031 | 1563 | 15% |
| 12-2032 | 1630 | 15% |
| 12-2033 | 1671 | 15% |
| 12-2034 | 1812 | 15% |
with a 5-year average of $119 million. Projected CapEx is expected to maintain at approximately 2% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 138 |
| 12-2026 | 150 |
| 12-2027 | 154 |
| 12-2028 | 159 |
| 12-2029 | 160 |
| 12-2030 | 167 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 123 |
| Days Inventory | 0 |
| Days Payables | 8 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 976 | 74 | 109 | 23 | 770 |
| 2026 | 1493 | 116 | 153 | 100 | 1124 |
| 2027 | 1694 | 136 | 162 | 137 | 1260 |
| 2028 | 1866 | 152 | 167 | 113 | 1434 |
| 2029 | 2051 | 171 | 173 | 95 | 1613 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 202.83 | 55.7% |
| 10-Year DCF (Growth) | 232.48 | 78.4% |
| 5-Year DCF (EBITDA) | 210.77 | 61.8% |
| 10-Year DCF (EBITDA) | 240.26 | 84.4% |
Is ICON PLC (ICLR) a buy or a sell? ICON PLC is definitely a buy. Based on our DCF analysis, ICON PLC (ICLR) appears to be significantly undervalued with upside potential of 78.4%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $130.28.