Intrinsic value of ICF International, Inc. - ICFI

Previous Close

$72.62

  Intrinsic Value

$26.48

stock screener

  Rating & Target

str. sell

-64%

Previous close

$72.62

 
Intrinsic value

$26.48

 
Up/down potential

-64%

 
Rating

str. sell

We calculate the intrinsic value of ICFI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  17.70
  16.43
  15.29
  14.26
  13.33
  12.50
  11.75
  11.07
  10.47
  9.92
  9.43
  8.99
  8.59
  8.23
  7.91
  7.61
  7.35
  7.12
  6.91
  6.72
  6.54
  6.39
  6.25
  6.13
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
Revenue, $m
  1,575
  1,834
  2,114
  2,415
  2,737
  3,079
  3,441
  3,822
  4,222
  4,641
  5,079
  5,535
  6,011
  6,505
  7,019
  7,554
  8,109
  8,687
  9,286
  9,910
  10,559
  11,233
  11,935
  12,667
  13,428
  14,222
  15,050
  15,913
  16,815
  17,756
Variable operating expenses, $m
  1,432
  1,667
  1,921
  2,194
  2,486
  2,796
  3,124
  3,469
  3,832
  4,212
  4,604
  5,017
  5,448
  5,896
  6,362
  6,847
  7,350
  7,874
  8,417
  8,983
  9,570
  10,182
  10,818
  11,481
  12,171
  12,891
  13,641
  14,424
  15,241
  16,094
Fixed operating expenses, $m
  31
  31
  32
  33
  33
  34
  35
  36
  36
  37
  38
  39
  40
  41
  42
  42
  43
  44
  45
  46
  47
  48
  49
  51
  52
  53
  54
  55
  56
  58
Total operating expenses, $m
  1,463
  1,698
  1,953
  2,227
  2,519
  2,830
  3,159
  3,505
  3,868
  4,249
  4,642
  5,056
  5,488
  5,937
  6,404
  6,889
  7,393
  7,918
  8,462
  9,029
  9,617
  10,230
  10,867
  11,532
  12,223
  12,944
  13,695
  14,479
  15,297
  16,152
Operating income, $m
  112
  135
  161
  189
  218
  249
  282
  317
  354
  392
  437
  479
  523
  568
  615
  664
  715
  769
  824
  881
  941
  1,003
  1,068
  1,135
  1,205
  1,278
  1,354
  1,434
  1,517
  1,604
EBITDA, $m
  134
  160
  188
  219
  252
  287
  324
  363
  404
  447
  492
  538
  587
  638
  691
  746
  803
  862
  923
  987
  1,054
  1,123
  1,196
  1,271
  1,349
  1,431
  1,516
  1,605
  1,698
  1,795
Interest expense (income), $m
  9
  11
  16
  22
  28
  35
  42
  50
  58
  66
  75
  85
  94
  105
  115
  126
  138
  150
  162
  175
  188
  202
  217
  232
  248
  264
  281
  299
  317
  337
  357
Earnings before tax, $m
  101
  119
  139
  160
  183
  207
  233
  259
  288
  317
  353
  385
  418
  453
  489
  527
  566
  606
  649
  693
  738
  786
  836
  887
  941
  997
  1,056
  1,117
  1,181
  1,247
Tax expense, $m
  27
  32
  38
  43
  49
  56
  63
  70
  78
  86
  95
  104
  113
  122
  132
  142
  153
  164
  175
  187
  199
  212
  226
  240
  254
  269
  285
  302
  319
  337
Net income, $m
  74
  87
  102
  117
  134
  151
  170
  189
  210
  231
  257
  281
  305
  331
  357
  384
  413
  443
  474
  506
  539
  574
  610
  648
  687
  728
  771
  815
  862
  911

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,429
  1,664
  1,918
  2,192
  2,484
  2,794
  3,123
  3,469
  3,832
  4,212
  4,609
  5,023
  5,454
  5,903
  6,370
  6,855
  7,359
  7,883
  8,427
  8,993
  9,581
  10,194
  10,831
  11,494
  12,185
  12,906
  13,657
  14,440
  15,259
  16,113
Adjusted assets (=assets-cash), $m
  1,429
  1,664
  1,918
  2,192
  2,484
  2,794
  3,123
  3,469
  3,832
  4,212
  4,609
  5,023
  5,454
  5,903
  6,370
  6,855
  7,359
  7,883
  8,427
  8,993
  9,581
  10,194
  10,831
  11,494
  12,185
  12,906
  13,657
  14,440
  15,259
  16,113
Revenue / Adjusted assets
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
  1.102
Average production assets, $m
  483
  563
  649
  741
  840
  945
  1,056
  1,173
  1,296
  1,425
  1,559
  1,699
  1,845
  1,997
  2,155
  2,319
  2,490
  2,667
  2,851
  3,042
  3,241
  3,449
  3,664
  3,889
  4,122
  4,366
  4,620
  4,885
  5,162
  5,451
Working capital, $m
  120
  139
  161
  184
  208
  234
  262
  290
  321
  353
  386
  421
  457
  494
  533
  574
  616
  660
  706
  753
  802
  854
  907
  963
  1,021
  1,081
  1,144
  1,209
  1,278
  1,349
Total debt, $m
  299
  406
  522
  646
  780
  921
  1,071
  1,229
  1,394
  1,568
  1,749
  1,937
  2,134
  2,339
  2,552
  2,773
  3,003
  3,241
  3,490
  3,748
  4,016
  4,295
  4,586
  4,888
  5,203
  5,532
  5,874
  6,232
  6,605
  6,994
Total liabilities, $m
  652
  759
  875
  999
  1,133
  1,274
  1,424
  1,582
  1,747
  1,921
  2,102
  2,290
  2,487
  2,692
  2,905
  3,126
  3,356
  3,594
  3,843
  4,101
  4,369
  4,648
  4,939
  5,241
  5,556
  5,885
  6,228
  6,585
  6,958
  7,347
Total equity, $m
  777
  905
  1,044
  1,192
  1,351
  1,520
  1,699
  1,887
  2,084
  2,291
  2,507
  2,732
  2,967
  3,211
  3,465
  3,729
  4,003
  4,288
  4,584
  4,892
  5,212
  5,545
  5,892
  6,253
  6,629
  7,021
  7,429
  7,856
  8,301
  8,765
Total liabilities and equity, $m
  1,429
  1,664
  1,919
  2,191
  2,484
  2,794
  3,123
  3,469
  3,831
  4,212
  4,609
  5,022
  5,454
  5,903
  6,370
  6,855
  7,359
  7,882
  8,427
  8,993
  9,581
  10,193
  10,831
  11,494
  12,185
  12,906
  13,657
  14,441
  15,259
  16,112
Debt-to-equity ratio
  0.380
  0.450
  0.500
  0.540
  0.580
  0.610
  0.630
  0.650
  0.670
  0.680
  0.700
  0.710
  0.720
  0.730
  0.740
  0.740
  0.750
  0.760
  0.760
  0.770
  0.770
  0.770
  0.780
  0.780
  0.780
  0.790
  0.790
  0.790
  0.800
  0.800
Adjusted equity ratio
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544
  0.544

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  74
  87
  102
  117
  134
  151
  170
  189
  210
  231
  257
  281
  305
  331
  357
  384
  413
  443
  474
  506
  539
  574
  610
  648
  687
  728
  771
  815
  862
  911
Depreciation, amort., depletion, $m
  22
  24
  27
  31
  34
  38
  42
  46
  50
  55
  55
  59
  65
  70
  75
  81
  87
  93
  100
  106
  113
  121
  128
  136
  144
  153
  162
  171
  180
  191
Funds from operations, $m
  96
  112
  129
  148
  168
  189
  212
  235
  260
  286
  312
  340
  370
  400
  432
  466
  500
  536
  573
  612
  652
  694
  738
  784
  831
  881
  932
  986
  1,042
  1,101
Change in working capital, $m
  18
  20
  21
  23
  24
  26
  27
  29
  30
  32
  33
  35
  36
  38
  39
  41
  42
  44
  46
  47
  49
  51
  53
  56
  58
  60
  63
  66
  69
  72
Cash from operations, $m
  78
  92
  108
  125
  143
  163
  184
  206
  230
  254
  279
  306
  334
  363
  393
  425
  458
  492
  528
  565
  603
  643
  685
  728
  773
  820
  869
  921
  974
  1,030
Maintenance CAPEX, $m
  -14
  -17
  -20
  -23
  -26
  -29
  -33
  -37
  -41
  -45
  -50
  -55
  -59
  -65
  -70
  -75
  -81
  -87
  -93
  -100
  -106
  -113
  -121
  -128
  -136
  -144
  -153
  -162
  -171
  -180
New CAPEX, $m
  -72
  -79
  -86
  -93
  -99
  -105
  -111
  -117
  -123
  -129
  -134
  -140
  -146
  -152
  -158
  -164
  -171
  -177
  -184
  -191
  -199
  -207
  -216
  -224
  -234
  -244
  -254
  -265
  -277
  -289
Cash from investing activities, $m
  -86
  -96
  -106
  -116
  -125
  -134
  -144
  -154
  -164
  -174
  -184
  -195
  -205
  -217
  -228
  -239
  -252
  -264
  -277
  -291
  -305
  -320
  -337
  -352
  -370
  -388
  -407
  -427
  -448
  -469
Free cash flow, $m
  -9
  -4
  2
  10
  19
  29
  40
  52
  66
  80
  94
  111
  128
  146
  166
  185
  206
  228
  250
  273
  298
  323
  349
  376
  403
  432
  463
  494
  526
  560
Issuance/(repayment) of debt, $m
  98
  107
  116
  125
  133
  142
  150
  158
  166
  173
  181
  189
  197
  205
  213
  221
  230
  239
  248
  258
  268
  279
  291
  303
  315
  328
  343
  357
  373
  390
Issuance/(repurchase) of shares, $m
  43
  41
  37
  32
  25
  18
  9
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  141
  148
  153
  157
  158
  160
  159
  158
  166
  173
  181
  189
  197
  205
  213
  221
  230
  239
  248
  258
  268
  279
  291
  303
  315
  328
  343
  357
  373
  390
Total cash flow (excl. dividends), $m
  132
  143
  155
  166
  177
  188
  198
  210
  231
  254
  276
  300
  325
  351
  378
  407
  436
  467
  498
  532
  566
  602
  639
  678
  719
  761
  805
  851
  899
  950
Retained Cash Flow (-), $m
  -117
  -128
  -138
  -149
  -159
  -169
  -179
  -188
  -197
  -207
  -216
  -225
  -235
  -244
  -254
  -264
  -274
  -285
  -296
  -308
  -320
  -333
  -347
  -361
  -376
  -392
  -409
  -426
  -445
  -465
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  15
  16
  16
  17
  18
  19
  20
  22
  34
  47
  60
  74
  90
  107
  125
  143
  162
  182
  202
  224
  246
  269
  293
  317
  343
  369
  396
  425
  454
  485
Discount rate, %
  4.70
  4.94
  5.18
  5.44
  5.71
  6.00
  6.30
  6.61
  6.94
  7.29
  7.66
  8.04
  8.44
  8.86
  9.31
  9.77
  10.26
  10.77
  11.31
  11.88
  12.47
  13.09
  13.75
  14.44
  15.16
  15.92
  16.71
  17.55
  18.42
  19.35
PV of cash for distribution, $m
  15
  14
  14
  14
  14
  13
  13
  13
  18
  23
  26
  29
  31
  33
  33
  32
  31
  29
  26
  24
  21
  18
  15
  12
  10
  8
  6
  5
  3
  2
Current shareholders' claim on cash, %
  96.9
  94.5
  92.7
  91.4
  90.4
  89.9
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6
  89.6

ICF International, Inc. provides professional services and technology-based solutions to government and commercial clients, including management, technology, and policy consulting and implementation services. The Company's services address four markets: energy, environment and infrastructure; health, education and social programs; safety and security, and consumer and financial. Its services include research and analytic services, assessment and advisory services, design and management services, solution identification and implementation services, and engagement services. The Company researches policy, industry and stakeholder issues, trends and behavior. The Company collects and analyzes various data to understand issues and options for its clients. The Company measures and evaluates results and their impact and, based on those assessments, the Company provides advice to its clients on how to navigate societal, market, business, communication and technology challenges.

FINANCIAL RATIOS  of  ICF International, Inc. (ICFI)

Valuation Ratios
P/E Ratio 29.4
Price to Sales 1.2
Price to Book 2.4
Price to Tangible Book
Price to Cash Flow 17.3
Price to Free Cash Flow 20.9
Growth Rates
Sales Growth Rate 4.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 7.7%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 45.8%
Total Debt to Equity 45.8%
Interest Coverage 9
Management Effectiveness
Return On Assets 4.9%
Ret/ On Assets - 3 Yr. Avg. 4.5%
Return On Total Capital 5.7%
Ret/ On T. Cap. - 3 Yr. Avg. 5.4%
Return On Equity 8.6%
Return On Equity - 3 Yr. Avg. 8.2%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 37.1%
Gross Margin - 3 Yr. Avg. 37.8%
EBITDA Margin 9.5%
EBITDA Margin - 3 Yr. Avg. 9.2%
Operating Margin 7%
Oper. Margin - 3 Yr. Avg. 6.7%
Pre-Tax Margin 6.3%
Pre-Tax Margin - 3 Yr. Avg. 6%
Net Profit Margin 4%
Net Profit Margin - 3 Yr. Avg. 3.7%
Effective Tax Rate 37.3%
Eff/ Tax Rate - 3 Yr. Avg. 38%
Payout Ratio 0%

ICFI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ICFI stock intrinsic value calculation we used $1338 million for the last fiscal year's total revenue generated by ICF International, Inc.. The default revenue input number comes from 0001 income statement of ICF International, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ICFI stock valuation model: a) initial revenue growth rate of 17.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.7%, whose default value for ICFI is calculated based on our internal credit rating of ICF International, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of ICF International, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ICFI stock the variable cost ratio is equal to 91%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $30 million in the base year in the intrinsic value calculation for ICFI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for ICF International, Inc..

Corporate tax rate of 27% is the nominal tax rate for ICF International, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ICFI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ICFI are equal to 30.7%.

Life of production assets of 28.6 years is the average useful life of capital assets used in ICF International, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ICFI is equal to 7.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $660.417 million for ICF International, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 18.774 million for ICF International, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of ICF International, Inc. at the current share price and the inputted number of shares is $1.4 billion.

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