Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. However, it isn't easy to find a great growth stock. In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end. However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the tr ...

Investors with an interest in Medical Services stocks have likely encountered both Icon PLC (ICLR) and GoodRx Holdings, Inc. (GDRX) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out. Icon PLC and GoodRx Holdings, Inc. are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that ICLR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst ou ...

Investment Thesis - ICON (ICLR) acquired PRA Health Sciences for ~$12Bn in Feb 2020, creating a new entity fully integrated by FY'21 [5] - The stock has doubled since the acquisition, with a current valuation of ~$370–$400/share based on 20x estimated post-tax earnings from FY'24–'26E [5] - The company is de-risked post-acquisition, with a 12-month total shareholder return (TSR) projected at ~18.4% and a base case CAGR of ~18% to FY'26E, reaching $559/share [6] Financial Performance - Q1 FY'21 net bookings increased by +10% YoY, with a book-to-bill ratio of 1.25–1.27x [10] - Management projects a book-to-bill ratio of 1.2x–1.3x quarterly, with an average of 1.25x for FY'24, indicating robust revenue growth of ~7% [10] - Earnings leverage is strong, with ~18% earnings growth projected on 7% sales growth, representing 2.5x earnings leverage [10] - Free cash flow (FCF) exceeds $1Bn annually, with ~$1.8Bn in NOPAT projected for FY'25/'26E [10] Valuation and Capital Deployment - The company is valued at ~20x NOPAT, supported by increasing ROICs and a capital base producing higher and more stable earnings [10] - Management has deleveraged $2Bn in debt since FY'21, with a leverage ratio of 1.8x net debt to adjusted EBITDA as of Q1 FY'24 [10] - Capital deployment opportunities include M&A and potential share repurchases, with $275M paid on Term Loan B in Q1 FY'24 [10] Growth Catalysts - Strong order book through FY'25, with a trailing 12-month book-to-bill ratio of 1.24x [10] - Earnings leverage from a high-quality business model, with the market comfortable paying >20x EBIT [10] - Valuations are supported by >$1Bn in FCF annually, increasing ROICs, and a capital base producing higher earnings [10] Historical Performance - Post-tax earnings increased from $483.5M in Sep-21 to $1,505.8M in Mar-24, with ROIC rising from 3.2% to 10.8% over the same period [15] - Free cash flow grew from $812M in Dec-21 to $1,582M in Mar-24, driven by improved post-tax margins and capital turnover [15] Future Projections - By FY'26E, the company is projected to reach ~$560/share, representing an 18% CAGR from current levels [17] - NOPAT is expected to grow from $1,505.8M in Mar-24 to $2,150.2M by FY'26E, with NOPAT per share increasing from $18.30 to $26.10 [19] - Economic earnings are projected to grow from $622.73M in FY'24E to $993.84M in FY'28E, with a cumulative sum of $4,011.92M over the investment horizon [20] Strategic Insights - The company has transformed its earnings and cash flow outlook since the PRAH acquisition, with increasing margins and capital turns [23] - Investors are comfortable paying ~20x NOPAT, valuing the company at ~$370/share today, with potential upside to $400/share on a FCF basis [23]

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both. Zacks Premium includes access to the Zacks Style Scores as well. Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform. Value S ...

When it comes to short-term investing or trading, they say "the trend is your friend." And there's no denying that this is the most profitable strategy. But making sure of the sustainability of a trend to profit from it is easier said than done. There are several stocks that passed through the screen and Icon PLC (ICLR) is one of them. Here are the key reasons why this stock is a solid choice for "trend" investing. A solid price increase over a period of 12 weeks reflects investors' continued willingness to ...

Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. However, it isn't easy to find a great growth stock. By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss. However, the task of finding cutting-edge growth stocks is made easy with the help of the Zack ...

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both. The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor. What are the Zacks Style Scores? Each stock is given an alphabetic rating of A, B, C, D or ...

What are the Zacks Style Scores? Value Score Momentum Score How Style Scores Work with the Zacks Rank The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank. Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both. Each stock is given an alphabetic rating of A, B, ...

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both. What are the Zacks Style Scores? Value Score Growth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over ...

Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. But finding a growth stock that can live up to its true potential can be a tough task. By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss. Studies have shown that stocks with the best growth features ...