Zinger Key Points
- ICON's 2025 revenue guidance is $8.05 billion–$8.65 billion, a 1% growth midpoint, versus consensus $8.5 billion.
- Adjusted EPS for 2025 is forecasted at $13.00–$15.00, flat compared to 2024 guidance midpoint of $14.83.
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Clinical research organization ICON plc ICLR announced its financial guidance for fiscal year 2025 on Tuesday.
What Happened: The Dublin-based company forecasts revenues of $8.05 billion — $8.65 billion. This represents growth of about 1% at the midpoint compared to the consensus of $8.5 billion.
The company expects adjusted earnings per share to be in the range of $13 to $15. That’s flat over the full-year 2024 adjusted earnings per share guidance midpoint compared to the consensus of $14.83.
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ICON CEO Steve Cutler says trial activity has been “impacted by cautious spending from biopharma customers in both the biotech and large pharma businesses.”
The company’s outlook for this year reflects an expected transition period, which includes a headwind from its top two customers on a combined basis, coupled with “an inconsistent recovery in biotech,” he added.
For fiscal year 2024, the company reaffirmed its current guidance of revenue of $8.26 billion — $8.3 billion and adjusted EPS of $13.90 – $14.10 versus consensus of $8.28 billion and $13.98, respectively.
Why It Matters: William Blair analysts are “surprised by the size of the topline cut relative to management’s initial thoughts last quarter (anticipated revenue growth in the low to mid-single digits for this year).”
Analyst Max Smock expects the company to face challenges in understanding “cautious spending patterns” from biopharma clients, including Pfizer Inc PFE and Johnson & Johnson JNJ.
There’s also uncertainty about when biotech demand will stabilize. Investors debate whether $14 or $15 per share was the right target for the quarter.
The initial guidance for next year will lean closer to $15, observers say. However, margins will face more pressure than expected.
Price Action: Icon stock is down 6.96% at $202.81 at last check Tuesday.
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