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CRA International (CRAI) Down 8.1% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for CRA International,Inc. (CRAI - Free Report) . Shares have lost about 8.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CRA International Misses Q1 Earnings, Revenues Beat
Management services provider CRA International reported first-quarter 2017 results, with GAAP earnings of $2,853 million or $0.33 per share compared with $2,423 million or $0.27 per share in the year-earlier quarter. The year-over-year increase in earnings was primarily due to higher revenues during the reported quarter.
Non-GAAP earnings in the reported quarter were $2,882 million or $0.33 per share compared with $2,659 million or $0.30 per share in the year-ago quarter. Non-GAAP earnings missed the Zacks Consensus Estimate of $0.37.
Quarter Highlights
Non-GAAP revenues in the first quarter increased 10% year over year to $88.2 million. The rise was driven by broad-based growth in legal regulatory and management consulting lines of businesses. International operations also continued to deliver solid results, led by Antitrust & Competition Economics and Marakon practices. The reported revenues exceeded the Zacks Consensus Estimate of $86 million.
GAAP gross profit in the reported quarter was $25.6 million compared with $25.4 million in the year-ago quarter, with the respective margins of 29% and 31.4%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter increased 12.2% year over year to $13.8 million.
Acquisition
On Jan 31, 2017, CRA International acquired C1 Consulting, a life sciences strategy consulting firm that helps pharmaceutical and biotech clients maximize their business potential through advanced analytics, customer insights, and therapy area expertise. The successful integration of the acquired firm will extend its capabilities in advanced analytics and market research as well as broaden its commercialization strategy offering, particularly related to rare and orphan diseases. The transaction will also enable it to extend its geographic footprint with new offices in San Francisco, California, New Jersey and Lucerne, Switzerland.
Balance Sheet
As of Apr 1, 2017, CRA International had cash and cash equivalents of $21.8 million while its long-term liabilities were $25.1 million. Cash used in operating activities for the quarter were $20.4 million compared with $10 million in first-quarter 2016.
Outlook
For 2017, CRA International expects non-GAAP revenues of $350–$360 million on favorable growth dynamics. Non-GAAP adjusted EBITDA margin is expected in a 15.8–16.6% band.
Although CRA International has been witnessing healthy demand lately, soft economic conditions and macroeconomic uncertainties continue to be headwinds. Proper integration of new hires remains an additional concern for the company.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, CRA International's stock has an average score of 'C', on both growth and momentum front. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth and momentum investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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CRA International (CRAI) Down 8.1% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for CRA International,Inc. (CRAI - Free Report) . Shares have lost about 8.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CRA International Misses Q1 Earnings, Revenues Beat
Management services provider CRA International reported first-quarter 2017 results, with GAAP earnings of $2,853 million or $0.33 per share compared with $2,423 million or $0.27 per share in the year-earlier quarter. The year-over-year increase in earnings was primarily due to higher revenues during the reported quarter.
Non-GAAP earnings in the reported quarter were $2,882 million or $0.33 per share compared with $2,659 million or $0.30 per share in the year-ago quarter. Non-GAAP earnings missed the Zacks Consensus Estimate of $0.37.
Quarter Highlights
Non-GAAP revenues in the first quarter increased 10% year over year to $88.2 million. The rise was driven by broad-based growth in legal regulatory and management consulting lines of businesses. International operations also continued to deliver solid results, led by Antitrust & Competition Economics and Marakon practices. The reported revenues exceeded the Zacks Consensus Estimate of $86 million.
GAAP gross profit in the reported quarter was $25.6 million compared with $25.4 million in the year-ago quarter, with the respective margins of 29% and 31.4%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter increased 12.2% year over year to $13.8 million.
Acquisition
On Jan 31, 2017, CRA International acquired C1 Consulting, a life sciences strategy consulting firm that helps pharmaceutical and biotech clients maximize their business potential through advanced analytics, customer insights, and therapy area expertise. The successful integration of the acquired firm will extend its capabilities in advanced analytics and market research as well as broaden its commercialization strategy offering, particularly related to rare and orphan diseases. The transaction will also enable it to extend its geographic footprint with new offices in San Francisco, California, New Jersey and Lucerne, Switzerland.
Balance Sheet
As of Apr 1, 2017, CRA International had cash and cash equivalents of $21.8 million while its long-term liabilities were $25.1 million. Cash used in operating activities for the quarter were $20.4 million compared with $10 million in first-quarter 2016.
Outlook
For 2017, CRA International expects non-GAAP revenues of $350–$360 million on favorable growth dynamics. Non-GAAP adjusted EBITDA margin is expected in a 15.8–16.6% band.
Although CRA International has been witnessing healthy demand lately, soft economic conditions and macroeconomic uncertainties continue to be headwinds. Proper integration of new hires remains an additional concern for the company.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
CRA International,Inc. Price and Consensus
CRA International,Inc. Price and Consensus | CRA International,Inc. Quote
VGM Scores
At this time, CRA International's stock has an average score of 'C', on both growth and momentum front. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth and momentum investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.