It's been a good week for ICON Public Limited Company (NASDAQ:ICLR) shareholders, because the company has just released its latest third-quarter results, and the shares gained 3.8% to US$235. ICON reported in line with analyst predictions, delivering revenues of US$2.1b and statutory earnings per share of US$1.97, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for ICON

Taking into account the latest results, the current consensus from ICON's 13 analysts is for revenues of US$8.69b in 2024. This would reflect a meaningful 8.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 48% to US$9.25. In the lead-up to this report, the analysts had been modelling revenues of US$8.68b and earnings per share (EPS) of US$9.61 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$282, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on ICON, with the most bullish analyst valuing it at US$306 and the most bearish at US$220 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that ICON's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.7% growth on an annualised basis. This is compared to a historical growth rate of 30% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.1% per year. Even after the forecast slowdown in growth, it seems obvious that ICON is also expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for ICON. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on ICON. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for ICON going out to 2025, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for ICON you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.