We came across a bullish thesis on ICON Public Limited Company (ICLR) on Substack by Oliver | MMMT Wealth. In this article, we will summarize the bulls’ thesis on ICLR. ICON Public Limited Company (ICLR)'s share was trading at $186.49 as of March 5^th. ICLR’s trailing and forward P/E were 19.57 and 13.21 respectively according to Yahoo Finance.

A clinical research lab with scientists in lab coats analyzing data.

ICON plc (ICLR) is a leading Clinical Research Organization (CRO) providing outsourced services to pharmaceutical, biotech, medical device, and government organizations to accelerate drug and therapy approvals through the FDA. Despite being relatively underappreciated by the market, ICON plays a crucial role in clinical research, contributing to 60% of FDA-approved drugs over the past year. However, its stock remains undervalued compared to peers, presenting a compelling investment opportunity. The company trades at just 1.6x P/B, significantly lower than Medpace (MEDP) and IQVIA (IQV), which have P/B multiples of 12.1x and 5.5x, respectively. This disconnect highlights a market inefficiency, particularly given ICON’s position as a leader in a sector that continues to see increasing demand. Drug development is becoming more complex, driving greater reliance on CROs, positioning ICON for sustained long-term growth. While recent revenue growth showed a slight decline of 1.2%, the company maintains a 12.7% net income margin, and its 2.2x EV/Sales valuation remains attractive. As reliance on CROs intensifies and ICON continues to cement its dominance, the current valuation offers an asymmetric risk-reward opportunity, making ICLR a strong candidate for long-term investors seeking exposure to the expanding clinical research industry.

ICON Public Limited Company (ICLR) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held ICLR at the end of the fourth quarter which was 48 in the previous quarter. While we acknowledge the risk and potential of ICLR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ICLR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.