ICON plc has disclosed an internal review of its accounting procedures centered on revenue recognition across fiscal years 2023-2025, and the probe has led Evercore to suspend its rating and target price for the stock. The firm said there is currently insufficient fundamental basis, or there are legal, regulatory or policy constraints, to support publishing a rating or target price.
The investigation is being overseen by ICON's Audit Committee with the assistance of external advisors. A Form 6-K filing indicates initial findings that revenue for both 2023 and 2024 may have been overstated by less than 2% in each year. ICON has withdrawn its 2025 EPS guidance and announced it plans to file fourth-quarter and full-year results for 2025 on or before April 30, 2026.
ICON added that preliminary work on the review suggests there has been no impact to customers. The company also emphasized that backlog and bookings are not subject to the investigation and said addressing the accounting matters is a strategic priority for management.
Market reaction has been swift. ICON's shares have dropped 8.43% over the past week and were trading at $133.14, close to a 52-week low of $125.10. Data from InvestingPro cited in the disclosure indicate the stock sits in oversold territory.
Evercore quantified the sensitivity of earnings to revenue reductions in its commentary to clients. The firm said a 1% lower revenue assumption could translate to an earnings impact ranging from $0.00 to $0.80 for 2023, and $0.15 to $1.00 for 2024. Given the ongoing inquiry, Evercore concluded it cannot maintain its fundamental assessment or a target price at this time.
Other broker-dealer activity followed the disclosure. Truist Securities downgraded ICON from Buy to Hold, citing concerns about growth and limited visibility into cancellation levels and revenue trends. Truist reduced its price target to $222.00 from $231.00 and said it expects conservative guidance for 2026 with flat revenue growth.
Alongside the accounting probe and the shifts in analyst coverage, ICON has continued to expand parts of its clinical research business. The company has opened the Brian Moran Cancer Institute in Illinois and said the move enhances the Accellacare Site Network's capacity to support oncology clinical trials.
ICON has indicated the inquiry is focused narrowly on revenue recognition and does not encompass its backlog or new bookings. The Audit Committee-led review is ongoing, and the company has committed to reporting its year-end financial statements by the April 30, 2026 deadline it disclosed.
Key developments at a glance
- ICON has launched an internal investigation into revenue recognition for 2023-2025, overseen by the Audit Committee with external advisors.
- Preliminary findings show potential revenue overstatement of less than 2% for each of 2023 and 2024.
- ICON withdrew 2025 EPS guidance and will report year-end financials on or before April 30, 2026.
- Evercore suspended its rating and target price; Truist downgraded the stock and cut its price target to $222.00 from $231.00.
- Company states backlog and bookings are not under review and reports no customer impact to date.