Charles River (CRAI) Stock Drops 9.8% Despite Q2 Earnings Beat

CRAI OMC EFX IQV

CRA International, Inc., which conducts business as Charles River Associates (CRAI - Free Report) , reported better-than-expected second-quarter fiscal 2022 results. CRAI did not raise its revenue guidance despite strong demand for consulting services. This might have failed to impress investors as the stock plunged 9.8% since the earnings release on Aug 4.

Non-GAAP EPS (excluding 1 cent from non-recurring items) came in at $1.58, which beat the Zacks Consensus Estimate by 25.4% and increased 3.3% year over year. Revenues of $149.1 million surpassed the consensus mark by 0.3% and increased nearly 1% year over year.

Other Quarterly Details

Charles River delivered 77% utilization, while headcount was up by 3.6% year over year. Non-GAAP EBITDA increased 3% year over year to $19.8 million. Non-GAAP EBITDA margin expanded 30 basis points year over year to 13.3%.

CRAI exited the quarter with $15.6 million cash compared with $43.7 million witnessed at the end of the prior quarter. Charles River used cash worth $17 million in operating activities while capex was $7.21 billion. In the quarter, CRAI paid out $2.25 million of dividends and repurchased shares worth $17.7 million.

2022 Guidance

For 2022, on a constant-currency basis relative to 2021, Charles River reaffirmed its previous revenue guidance between $585 million and $605 million.  

CRAI raised its view for non-GAAP EBITDA margin, which is now expected in the range of 11.3-12% compared with the prior expectation of 10.8-11.5%. Currently, Charles River carries a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performances of Some Other Business Services Companies

Equifax (EFX - Free Report) reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.

EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.

IQVIA Holdings (IQV - Free Report) reported solid second-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.

Omnicom Group (OMC - Free Report) reported impressive second-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.

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