ICF International (ICFI) Margin Expansion Reinforces Bullish Value Narrative as Net Profit Reaches 5.5%

ICF International (ICFI) posted a net profit margin of 5.5%, up from last year's 5%, with annual earnings growth running at 9% most recently and averaging 13.8% per year over the past five years. Revenue and earnings are forecast to rise at 2.8% and 7.3% per year respectively, trailing the wider US market outlook. Shares trade at a price-to-earnings ratio of 13.7, notably below industry and peer group averages. Improving margins and a history of consistent profit growth are likely to appeal to investors focused on value and stability in their long-term outlook.

See our full analysis for ICF International.

Next up, we will see how these headline results compare to the widely followed narratives for ICF International, highlighting where the market view might shift or hold firm.

See what the community is saying about ICF InternationalNasdaqGS:ICFI Earnings & Revenue History as at Nov 2025

Backlog and Book-to-Bill Signal Future Stability

ICF International's sequential improvements in procurement and a book-to-bill ratio above 1.3 point to an accelerating conversion of signed contracts into revenue, increasing visibility for the next 12 to 24 months. Analysts' consensus view sees the high book-to-bill as evidence that commercial energy and international contract wins are providing reliable revenue streams.

Consensus narrative notes that expanding demand for energy and IT modernization is driving high-margin contracts and improving stability beyond the volatile federal segment. Despite federal contract delays, multi-year commercial energy awards and a ramp-up in international work help cushion the backlog, supporting longer-term growth even as federal revenues decline 25.2% year-on-year.

To see how the market’s consensus narrative stacks up against these contract trends, dive into the full community view. 📊 Read the full ICF International Consensus Narrative.

Margin Expansion as Project Mix Shifts

Gross and net margins are holding firm, with net profit margin improving to 5.5%, as ICF captures more higher-margin commercial and IT contracts while keeping cost management tight. Analysts' consensus view points out a positive shift:

Improved project mix and greater share of direct labor have led to margin resilience, with cost discipline helping offset declines from slower federal procurement. Consensus narrative contrasts margin gains against expectations of some margin shrinkage from 5.5% to 5.1% in coming years, reminding investors that future margin performance will depend on ongoing contract mix improvements and successful cost controls.

Low Valuation Despite Sector Premium

The current price-to-earnings ratio of 13.7 sits far below both the Professional Services industry average (25.9) and peer average (37.1), while the current share price of $80.28 remains at a 21%+ discount to the analyst price target of $101.75 and at an even bigger gap to the DCF fair value of $157.13. Analysts' consensus view highlights this stretch of discounted valuation:

Even as consensus expects slightly declining earnings through 2028, the analyst price target is set 26% above today’s share price, underscoring a view that ICF’s moderate growth and margin profile remains undervalued compared to peers and long-run fair value models. The consensus finds it notable that analysts are pricing upside into the stock despite acknowledging near-term profit headwinds, in part due to ongoing margin resilience and contract-driven revenue visibility.

Story Continues

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for ICF International on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your ICF International research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

See What Else Is Out There

Despite ICF International’s improving margins and robust backlog, near-term profit headwinds and slower federal revenues may pressure sustained earnings growth and valuation upside.

Prefer companies delivering more predictable results? Find businesses with steadier revenue and profit trends that consistently outperform volatility by focusing on stable growth stocks screener (2103 results).

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.

Companies discussed in this article include ICFI.

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