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Is it the Right Time to Add CRL Stock to Your Portfolio Now?
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Key Takeaways
Charles River's DSA segment drives growth with rising outsourcing demand across pharma and biotech.
Recent acquisitions and collaborations expand CRL's drug discovery, safety testing and AI capabilities.
Forex pressures and cautious biotech spending create headwinds for Charles River's revenue growth.
Charles River Laboratories International, Inc. (CRL - Free Report) is well-poised to grow in the coming quarters, courtesy of the favorable growth prospects in its Discovery and Safety Assessment (“DSA”) segment. Strategic acquisitions and collaborations help expand its capabilities across the drug discovery and early-stage development continuum. Solid financial health is also an advantage. Yet, headwinds from currency fluctuations and macroeconomic volatilities raise concerns for Charles River’s operations.
In the past year, this Zacks Rank #2 (Buy) stock has fallen 15.4% compared with the industry’s 16.6% drop. However, the S&P 500 composite has risen 17.4% during the same period.
The renowned, non-clinical global drug development company has a market capitalization of $7.94 billion. Charles River has an earnings yield of 6.3%, which compares favorably to the industry’s 3.9% yield. It surpassed estimates in each of the trailing four quarters, delivering an average earnings surprise of 12.8%.
Let’s delve deeper.
Upsides for CRL Stock
DSA, A Potential Growth Driver: Charles River is the leading global provider of outsourced drug discovery, non-clinical development and regulated safety testing services. The company’s extensive expertise spans identifying preclinical candidates and safety assessment studies for numerous types of compounds, including cell and gene therapies, and small and large molecule pharmaceuticals. Demand is supported by large pharmaceutical companies’ continued shift to outsourced drug development models, alongside mid-size and emerging biotechs, industrial and agrochemical firms and non-governmental organizations that rely on outsourcing.
In 2023, Charles River acquired Noveprim, the Mauritius-based provider of non-human primates (NHPs), bolstering and diversifying the supply chain for this segment. It also acquired SAMDI Tech, Inc. (SAMDI), a leading provider of high-quality, label-free high-throughput screening (HTS) solutions for drug discovery research. In the second quarter of 2025, favorable DSA demand trends, together with the company’s ongoing constructive biopharma client discussions, signaled stabilization in the preclinical demand environment.
Image Source: Zacks Investment Research
Strategic Deals Drive Growth: In the second quarter of 2025, Charles River extended its multi-decade collaboration with CHDI Foundation to progress options for the treatment of Huntington’s disease. This year, the company also deepened its strategic collaboration with Deciphex to focus on advancing cutting-edge image management solutions while continuing to develop novel AI tools for toxicologic pathology. Additionally, Charles River partnered with Akron Bio to enhance operations with the integration of CGMP materials into the cell therapy platform.
In 2024, the company strengthened its neurological research efforts through multiple collaborations, including with Lundbeck A/S (Lundbeck) and the integration of Insightec’s focused ultrasound technology. Additionally, it partnered with the FOXG1 Research Foundation to advance its gene therapy through clinical trials. Under a contract development and manufacturing organization agreement, the company will manufacture Good Manufacturing Practice plasmid DNA for AAVantgarde.
Stable Solvency Structure: Charles River exited the second quarter of 2025 with cash and cash equivalents of $182.8 million, while short-term debt payable was nil. This is good news in terms of the company’s solvency position, particularly during the time of worldwide macroeconomic complications. Meanwhile, long-term debt dropped 7.1% sequentially, reaching $2.33 billion. Debt-to-capital of 44% was 41% compared to 44% in the first quarter, while the times interest ratio fell 0.4% to 0.8%.
What Ails Charles River?
Macroeconomic Condition: Charles River is experiencing a cautious spending environment, particularly among its global biopharmaceutical and biotechnology clients within the DSA segment, mainly as they reassess their budgets, reprioritize their drug pipelines and manage their cost structures. This year, CRL anticipates that the ongoing funding challenges among early-stage biotech clients are likely to dampen CRADL service demand and slow down the expected utilization capacity. Moreover, the RMS segment faces risk from a recent NIH policy that significantly reduces research grants by limiting payments for indirect overhead. On a broader macroeconomic level, the company is now subject to tariffs on imports from its major supplier countries such as Vietnam, Mauritius and China.
Foreign Exchange Translation Impacts Sales: Foreign exchange is a major headwind for Charles River as a considerable percentage of its revenues comes from outside the United States. While the company reports in U.S. dollars, its subsidiaries conduct business in various currencies such as the Euro, British Pound, Canadian Dollar and Mauritian Rupee. The strengthening of the U.S. dollar in recent months has intensified foreign exchange headwinds.
CRL Stock Estimate Trend
The Zacks Consensus Estimate for CRL’s 2025 earnings has jumped 5.1% in the past 30 days.
The Zacks Consensus Estimate for the company’s 2025 revenues is pegged at $3.97 billion, suggesting a 1.9% decrease from the year-ago reported number.
Masimo has an estimated long-term earnings growth rate of 12.5% compared with the industry’s 9.9%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 9.17%. MASI shares have rallied 18.7% against the industry’s 15.1% fall in the past year.
Envista, carrying a Zacks Rank #2, has an estimated earnings growth rate of 15.2% for fiscal 2026 compared with the S&P 500 composite’s 11.7% growth. Shares of the company have rallied 17.9% compared with the industry’s 2.5% rise. NVST’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 16.50%.
Phibro Animal Health, carrying a Zacks Rank #2, has an earnings yield of 6.3% against the industry’s -0.3%. Shares of the company have surged 94.4% compared with the industry’s 2.5% growth. PAHC’s earnings outpaced estimates in each of the trailing four quarters, with the average surprise being 27.9%.
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Is it the Right Time to Add CRL Stock to Your Portfolio Now?
Key Takeaways
Charles River Laboratories International, Inc. (CRL - Free Report) is well-poised to grow in the coming quarters, courtesy of the favorable growth prospects in its Discovery and Safety Assessment (“DSA”) segment. Strategic acquisitions and collaborations help expand its capabilities across the drug discovery and early-stage development continuum. Solid financial health is also an advantage. Yet, headwinds from currency fluctuations and macroeconomic volatilities raise concerns for Charles River’s operations.
In the past year, this Zacks Rank #2 (Buy) stock has fallen 15.4% compared with the industry’s 16.6% drop. However, the S&P 500 composite has risen 17.4% during the same period.
The renowned, non-clinical global drug development company has a market capitalization of $7.94 billion. Charles River has an earnings yield of 6.3%, which compares favorably to the industry’s 3.9% yield. It surpassed estimates in each of the trailing four quarters, delivering an average earnings surprise of 12.8%.
Let’s delve deeper.
Upsides for CRL Stock
DSA, A Potential Growth Driver: Charles River is the leading global provider of outsourced drug discovery, non-clinical development and regulated safety testing services. The company’s extensive expertise spans identifying preclinical candidates and safety assessment studies for numerous types of compounds, including cell and gene therapies, and small and large molecule pharmaceuticals. Demand is supported by large pharmaceutical companies’ continued shift to outsourced drug development models, alongside mid-size and emerging biotechs, industrial and agrochemical firms and non-governmental organizations that rely on outsourcing.
In 2023, Charles River acquired Noveprim, the Mauritius-based provider of non-human primates (NHPs), bolstering and diversifying the supply chain for this segment. It also acquired SAMDI Tech, Inc. (SAMDI), a leading provider of high-quality, label-free high-throughput screening (HTS) solutions for drug discovery research. In the second quarter of 2025, favorable DSA demand trends, together with the company’s ongoing constructive biopharma client discussions, signaled stabilization in the preclinical demand environment.
Image Source: Zacks Investment Research
Strategic Deals Drive Growth: In the second quarter of 2025, Charles River extended its multi-decade collaboration with CHDI Foundation to progress options for the treatment of Huntington’s disease. This year, the company also deepened its strategic collaboration with Deciphex to focus on advancing cutting-edge image management solutions while continuing to develop novel AI tools for toxicologic pathology. Additionally, Charles River partnered with Akron Bio to enhance operations with the integration of CGMP materials into the cell therapy platform.
In 2024, the company strengthened its neurological research efforts through multiple collaborations, including with Lundbeck A/S (Lundbeck) and the integration of Insightec’s focused ultrasound technology. Additionally, it partnered with the FOXG1 Research Foundation to advance its gene therapy through clinical trials. Under a contract development and manufacturing organization agreement, the company will manufacture Good Manufacturing Practice plasmid DNA for AAVantgarde.
Stable Solvency Structure: Charles River exited the second quarter of 2025 with cash and cash equivalents of $182.8 million, while short-term debt payable was nil. This is good news in terms of the company’s solvency position, particularly during the time of worldwide macroeconomic complications. Meanwhile, long-term debt dropped 7.1% sequentially, reaching $2.33 billion. Debt-to-capital of 44% was 41% compared to 44% in the first quarter, while the times interest ratio fell 0.4% to 0.8%.
What Ails Charles River?
Macroeconomic Condition: Charles River is experiencing a cautious spending environment, particularly among its global biopharmaceutical and biotechnology clients within the DSA segment, mainly as they reassess their budgets, reprioritize their drug pipelines and manage their cost structures. This year, CRL anticipates that the ongoing funding challenges among early-stage biotech clients are likely to dampen CRADL service demand and slow down the expected utilization capacity. Moreover, the RMS segment faces risk from a recent NIH policy that significantly reduces research grants by limiting payments for indirect overhead. On a broader macroeconomic level, the company is now subject to tariffs on imports from its major supplier countries such as Vietnam, Mauritius and China.
Foreign Exchange Translation Impacts Sales: Foreign exchange is a major headwind for Charles River as a considerable percentage of its revenues comes from outside the United States. While the company reports in U.S. dollars, its subsidiaries conduct business in various currencies such as the Euro, British Pound, Canadian Dollar and Mauritian Rupee. The strengthening of the U.S. dollar in recent months has intensified foreign exchange headwinds.
CRL Stock Estimate Trend
The Zacks Consensus Estimate for CRL’s 2025 earnings has jumped 5.1% in the past 30 days.
The Zacks Consensus Estimate for the company’s 2025 revenues is pegged at $3.97 billion, suggesting a 1.9% decrease from the year-ago reported number.
Other Key Picks
Some other top-ranked stocks in the broader medical space are Masimo (MASI - Free Report) , Envista (NVST - Free Report) and Phibro Animal Health (PAHC - Free Report) .
Masimo has an estimated long-term earnings growth rate of 12.5% compared with the industry’s 9.9%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 9.17%. MASI shares have rallied 18.7% against the industry’s 15.1% fall in the past year.
MASI sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Envista, carrying a Zacks Rank #2, has an estimated earnings growth rate of 15.2% for fiscal 2026 compared with the S&P 500 composite’s 11.7% growth. Shares of the company have rallied 17.9% compared with the industry’s 2.5% rise. NVST’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 16.50%.
Phibro Animal Health, carrying a Zacks Rank #2, has an earnings yield of 6.3% against the industry’s -0.3%. Shares of the company have surged 94.4% compared with the industry’s 2.5% growth. PAHC’s earnings outpaced estimates in each of the trailing four quarters, with the average surprise being 27.9%.