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Icon PLC Enjoying Wall Street Bonanza And FDA Tailwind

Sergio Heiber profile picture
Sergio Heiber


  • ICON is one of the market share leaders in a fast growing market industry that has penetrated only about half of its target market.
  • The industry position and free cash flow makes ICON an attractive takeover candidate in an industry that is experiencing heavy M&A activity.
  • The industry is receiving favorable FDA tailwinds.

Icon PLC (NASDAQ:ICLR) is an Irish based Contract Research Organization. CROs conduct clinical research, gather patients and doctors and leads their drug developing clients through the regulatory approval process. The company has a competitive position in a rising industry, is a potential acquisition target and benefits from current FDA policies.

Competitive Position

Icon is one of only a handful of companies that is able to provide all services to drug developers from molecular to all phases of the regulatory approval process on a global basis. Additionally, it is customer friendly as it does not offer its services on an all or nothing basis as is the case with some competitors. Icon allows the customer to choose from its ever expanding menu.

The company has consistently grown revenues by acquisitions as well as organically, with the stock price doubling since I first wrote about it in early 2015. Client retention is not a problem due to the cost to the customer in switching to a competitor and because competition is more driven by reputation than by price consideration. This is an ideal environment for the big guys to get bigger as well as richer.

ChartICLR data by YCharts

The CRO industry is fragmented with over 1000 companies competing in a market currently worth $38 billion last year and projected to grow at a CAGR of 7.6% to $56 billion by 2023 according to this study.


Lab Holding (LH) $10441
Quintiles (IQV) 9739
Syneos Health (SYNH) 2672
Parexel 2441
PRA Health (PRAH) 2259
Pharmaceutical Product Dev. 1900
Charles River (CRL) 1857
icon (ICLR) 1758
Wuxi Aptec 1011
Medpace Holdings (MEDP) 436

Acquisition Target

All of the above companies have grown by merger and acquisition in an industry that is undergoing "deal bonanza

ChartICLR Free Cash Flow (NYSE:TTM) data by YCharts

This article was written by

Sergio Heiber profile picture
I write about and invest in mostly early commercial stage companies that have a large TAM and zero to little direct competition. I will provide updates on companies that I introduce as long as the goalposts set by management are met. Of course, there are always unforeseen developments more often in the microcap world than otherwise and there are macro conditions that are beyond the control of company management. I'm also not always right but I like the risk/reward characteristics of investing in micro-caps.My articles are reflective of my investment interests and hopefully provide readers with ideas that they can further explore. I tend to be on the long side and generally abstain from writing negative or short themes. Besides my articles on SA, readers can find my work at MicroCapClub.com and StockPick.app

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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