Morningstar | Icon's 3Q Performance Provided No Major Surprises
Icon's third-quarter results provided no major surprises to us. We are leaving our narrow moat rating intact, and we do not anticipate changes to our fair value estimate. We continue to think the company will benefit from its strategic focus on partnerships, while performance should remain boosted by Icon's operational discipline.Third-quarter revenue grew 8% after excluding impacts from the new revenue recognition standard, compared with the year-ago period. We still forecast mid-single-digit revenue growth during the 10-year forecast period of our model. Backlog after adjusting for the effect of the ASC 606 revenue recognition standard grew 11% compared with the year-ago period. Although management indicated some hiring challenges in certain regions, we are encouraged by the company's persistently high employee retention rates, and we think the company will generally maintain its global hiring efforts in order to address growth. Separately, Icon reported a net book/bill of 1.27 times for the quarter, which we think bodes well for the company's future growth trajectory.
Icon is engaged in providing outsourced development services to the pharmaceutical, biotechnology and medical device industries. Co. specializes in the strategic development, management and analysis of programs that support clinical development from compound selection to Phase I-IV clinical studies. Co.'s services, which are integral elements of the clinical development process, include clinical trials management, biometric activities, consulting, imaging, contract staffing, informatics and laboratory services. Co. in engaged in conducting clinical trials in most therapeutic areas on a global basis and has the operational flexibility to provide development services on a stand-alone basis.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
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