ICON plc Ordinary Shares (ICLR)

FairStock Score: 54/100 — MIXED

Key Financials

Strengths

• Generates $925 million in annual free cash flow (11.0% yield on market cap)
• Conservative balance sheet with debt-to-equity of just 0.38, providing financial flexibility
• Established organization with 39,800 employees providing operational scale

Concerns

• Altman Z-Score of 1.1 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

ICON plc Ordinary Shares is a small-cap healthcare company valued at $8.4 billion. The business generates $8.1 billion in annual revenue with a 0.0% net margin and $925 million in free cash flow. From a quality standpoint, ICON shows distressed Altman Z-Score of 1.1 warrants caution and modest 6% ROE. On valuation, the stock is attractively valued at 14.3x earnings, with a modest 24% margin of safety vs Graham Number. Growth dynamics show revenue growing at 0.6% and profit growth of -98.8%. Our composite FairStock Score of 54/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $925 million in annual free cash flow (11.0% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the healthcare space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer