Icon Plc is scored 52 for moat and 64 for management. The management score rests on a return on invested capital of 6.7% and a gross margin of 26.4% — figures that describe a business earning a respectable return on what it employs. Debt sits at 0.39x equity. The moderate moat and strong management are not the same judgement, and the gap between them is where the argument about this business sits.
The price anchors are built on deliberately conservative assumptions. Growth is modelled at 15.0% a year, below the 24.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 30.0x. That produces an intrinsic value of $127.81, a 10-CAP price of $184.64 and a payback time price of $291.47, with the value zone set at the highest of the three, $291.47. Today's price of $161.85 sits inside that zone.
The price sits inside the value zone, but the business scores 52 for moat and 64 for management. Cheap and good are different tests, and only one of them is passed here.
| Price | $161.85 |
| Market cap | $12.4B |
| P/E ratio | 38.0x |
| Return on invested capital | 6.7% |
| Gross margin | 26.4% |
| Debt to equity | 0.39x |
| Free cash flow yield | 6.0% |
| Growth rate used | 15.0% |
| Growth rate measured | 24.0% |
| Exit multiple assumed | 30.0x |
| Company | Moat | Buy price |
| Eurofins Scientific (ERFSF) | 47 | $114.44 |
| Medpace Holdings Inc (MEDP) | 86 | $405.75 |
| LabCorp (LH) | 42 | $158.56 |
| Quest Diagnostics (DGX) | 62 | $123.77 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Icon Plc rather than accepting ours.