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Charles River Associates (CRAI) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of CRA International (CRAI - Free Report) ? Shares have been on the move with the stock up 21.6% over the past month. The stock hit a new 52-week high of $125.8 in the previous session. CRA International has gained 32.7% since the start of the year compared to the -27% move for the Zacks Business Services sector and the -22.4% return for the Zacks Consulting Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 3, 2022, CRA reported EPS of $1.64 versus consensus estimate of $1.23 while it beat the consensus revenue estimate by 0.82%.
For the current fiscal year, CRA is expected to post earnings of $6.16 per share on $595.35 million in revenues. This represents a 12.2% change in EPS on a 5.2% change in revenues. For the next fiscal year, the company is expected to earn $6.11 per share on $620.1 million in revenues. This represents a year-over-year change of -0.7% and 4.16%, respectively.
Valuation Metrics
CRA may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
CRA has a Value Score of A. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 20.1X current fiscal year EPS estimates, which is not in-line with the peer industry average of 23.4X. On a trailing cash flow basis, the stock currently trades at 13.6X versus its peer group's average of 19.8X. Additionally, the stock has a PEG ratio of 1.41. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, CRA currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if CRA meets the list of requirements. Thus, it seems as though CRA shares could have a bit more room to run in the near term.
How Does CRAI Stack Up to the Competition?
Shares of CRAI have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Huron Consulting Group Inc. (HURN - Free Report) . HURN has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of D.
Earnings were strong last quarter. Huron Consulting Group Inc. beat our consensus estimate by 2.02%, and for the current fiscal year, HURN is expected to post earnings of $3.96 per share on revenue of $1.1 billion.
Shares of Huron Consulting Group Inc. have gained 0.9% over the past month, and currently trade at a forward P/E of 22.83X and a P/CF of 19.75X.
The Consulting Services industry is in the top 16% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CRAI and HURN, even beyond their own solid fundamental situation.
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Charles River Associates (CRAI) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of CRA International (CRAI - Free Report) ? Shares have been on the move with the stock up 21.6% over the past month. The stock hit a new 52-week high of $125.8 in the previous session. CRA International has gained 32.7% since the start of the year compared to the -27% move for the Zacks Business Services sector and the -22.4% return for the Zacks Consulting Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 3, 2022, CRA reported EPS of $1.64 versus consensus estimate of $1.23 while it beat the consensus revenue estimate by 0.82%.
For the current fiscal year, CRA is expected to post earnings of $6.16 per share on $595.35 million in revenues. This represents a 12.2% change in EPS on a 5.2% change in revenues. For the next fiscal year, the company is expected to earn $6.11 per share on $620.1 million in revenues. This represents a year-over-year change of -0.7% and 4.16%, respectively.
Valuation Metrics
CRA may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
CRA has a Value Score of A. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 20.1X current fiscal year EPS estimates, which is not in-line with the peer industry average of 23.4X. On a trailing cash flow basis, the stock currently trades at 13.6X versus its peer group's average of 19.8X. Additionally, the stock has a PEG ratio of 1.41. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, CRA currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if CRA meets the list of requirements. Thus, it seems as though CRA shares could have a bit more room to run in the near term.
How Does CRAI Stack Up to the Competition?
Shares of CRAI have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Huron Consulting Group Inc. (HURN - Free Report) . HURN has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of D.
Earnings were strong last quarter. Huron Consulting Group Inc. beat our consensus estimate by 2.02%, and for the current fiscal year, HURN is expected to post earnings of $3.96 per share on revenue of $1.1 billion.
Shares of Huron Consulting Group Inc. have gained 0.9% over the past month, and currently trade at a forward P/E of 22.83X and a P/CF of 19.75X.
The Consulting Services industry is in the top 16% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CRAI and HURN, even beyond their own solid fundamental situation.