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Charles River's (CRAI) Diversification Fuels Growth Globally

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CRA International, Inc. (CRAI - Free Report) , or Charles River Associates, has had an impressive run over the past year. The stock has jumped 36.5%, outperforming 23.3% growth of the industry it belongs to and the 27.6% rise of the Zacks S&P 500 composite.

CRAI reported better-than-expected fourth-quarter 2023 results. Earnings per share (excluding 1 cent from non-recurring items) were $1.63, which surpassed the Zacks Consensus Estimate by 48.2% and increased 37% year over year. Revenues of $161.6 million beat the consensus mark by 8.1% and increased 11.5% from the year-ago quarter.

How Is CRAI Doing?

Charles River operates through a global network of coordinated offices spread across North America and Europe. Its global presence gives it the opportunity to work with the world’s leading professionals on numerous issues. This assists the company in improving its knowledge base and areas of functional expertise. Most of its clients are multinational firms that face complicated issues. The company’s top-line growth is facilitated by CRAI’s international operations, which helps with expansion globally. Revenues are anticipated to grow 3.5%, 3.7% and 3.6% year over year in 2024, 2025 and 2026, respectively.

CRAI has a diversified business mix. Proficiency in multiple industries helps the company to meet the needs of different clients and offer innovative services. Further, it gets to know about business strategies adopted across the world. A multi-disciplinary setup enables it to bring experts from all fields under one platform. The diversification in its business mix assists in decreasing dependence on any specific market, industry, or geographic area. This makes the company adaptable to changing conditions.

Charles River returns value to shareholders consistently in the forms of dividends and share repurchases. In 2023, 2022 and 2021, the company repurchased shares worth $24.8 million, $27.6 million and $44.9 million, respectively. It paid out $10.8 million, $9.58 million and $8.29 million as dividends during 2023, 2022 and 2021, respectively. Such a strategy shows that the company is committed to creating value for shareholders and improving the underlying confidence in its business.

These initiatives not only instill investors’ confidence but also positively impact the bottom line. Partly due to these positives, the company’s shares have moved up 36.5% in the trailing 12 months.

Zacks Rank and Other Stocks to Consider

CRAI currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader Zacks Business Services sector are SPX Technologies, Inc. (SPXC - Free Report) and UiPath (PATH - Free Report) .

SPX Technologies currently sports a Zacks Rank of 1 (Strong Buy). SPXC has a long-term earnings growth expectation of 18%. You can see the complete list of today’s Zacks #1 Rank stocks here.

SPXC delivered a trailing four-quarter earnings surprise of 23.2%, on average.

UiPath flaunts a Zacks Rank of 1 at present. PATH has a long-term earnings growth expectation of 22.5%.

PATH delivered a trailing four-quarter earnings surprise of 192%, on average.


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