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Charles River (CRAI) Beats on Q1 Earnings, Ups '21 Guidance

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Charles River Associates (CRAI - Free Report) reported solid first-quarter 2021 results, with both earnings and revenues beating the Zacks Consensus Estimate. The better-than-expected results, however, failed to impress the market as there has not been any major price change since the earnings release.

Non-GAAP EPS came in at $1.37, which beat the Zacks Consensus Estimate by 65.1% and increased 63.1% year over year. Revenues of $146.5 million surpassed the consensus mark by 13.9% and increased 16.1% year over year, driven by improved utilization and headcount increase.

The company recorded double-digit revenue growth in Financial Economics, Forensic Services, Antitrust & Competition Economics, Labor & Employment, Intellectual Property, and Risk, Investigations & Analytics practices. It achieved double-digit revenue growth across both North American and international operations.

Charles River’s shares have gained a huge 545% over the past year, significantly outperforming the 11.8% rally of the industry it belongs to.

Other Quarterly Details

The company delivered 76% utilization while headcount was up by 4.8% year over year. Non-GAAP EBITDA increased 37.8% year over year to $17.8 million. Non-GAAP EBITDA margin expanded 190 basis points year over year to 10.2%.

The company exited the quarter with cash and cash equivalents of $31.7 million compared with $45.7 million witnessed at the end of the prior quarter. It used $39.8 million of cash from operating activities and capex was $0.7 million. In the quarter, Charles River paid out $2.1 million in dividends and repurchased shares worth $9.6 million.

Raised 2021 Guidance

The company now expects full-year 2021 constant-currency revenues to be between $550 million and $570 million, compared with the previous expectation of $530 million and $550 million. The midpoint ($560 million) of the revised guided range is lower than the current Zacks Consensus Estimate of $561.4 million.

Non-GAAP EBITDA margin is now anticipated in the band of 10% to 10.5%, compared with the earlier guidance of 9.5% to 10.2%.

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.

Performance of Other Business Services Companies

Equifax’s (EFX - Free Report) first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and increased on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus mark by 7.9% and rose 26.6% year over year on a reported basis as well as on a local-currency basis.

Robert Half’s (RHI - Free Report) first-quarter 2021 earnings of 98 cents per share beat the consensus mark by 22.5% and were up 24.1% year over year. Revenues of $1.4 billion surpassed the consensus mark by 3.3% but declined 7.2% year over year on a reported basis and 7.6% on an adjusted basis.

Omnicom’s (OMC - Free Report) first-quarter 2021 adjusted earnings of $1.33 per share beat the consensus mark by 16.7% and increased 11.8% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3.6% and increased marginally year over year.

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