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CRAI Jumps 20% in 3 Months as Demand Broadens Across Key Practices
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Key Takeaways
CRAI shares rose 20% in three months as second-quarter revenue climbed 12.8% to $210.8 million.
Charles River raised fiscal 2026 constant-currency revenue guidance to $805-$820 million.
CRAI faces margin and cash-conversion pressure from higher talent costs, receivables and revolver debt.
CRA International, Inc. (CRAI - Free Report) shares have gained 20% in the past three months, putting the focus on whether improving business momentum can support the advance. Second-quarter revenue growth, a broader project pipeline and higher fiscal 2026 guidance strengthen the operating case.
The counterweight is cost and balance-sheet pressure. Higher talent-related spending has weighed on first-half margins, while elevated receivables and revolver borrowings make cash conversion an important part of the outlook for investors after the recent rally.
CRAI's Revenue Momentum Broadens
Second-quarter revenues increased 12.8% year over year to $210.8 million. Eight practices representing 95% of revenues posted growth, showing that demand extended across much of Charles River's advisory portfolio.
Legal & Regulatory revenues rose 10.1%, while Management Consulting advanced 25.5%. The broader consulting backdrop also remains active. Huron Consulting Group (HURN - Free Report) reported 16% second-quarter growth in revenues before reimbursable expenses, while FTI Consulting (FCN - Free Report) posted 5.3% revenue growth in the same period.
Charles River's Pipeline Supports Visibility
Average weekly project lead flow and new project originations increased at double-digit rates from the prior-year quarter. Those indicators matter because they point to replenishing demand rather than growth tied only to projects already underway.
Management also cited historically high conversion rates for new opportunities in the Energy and Life Sciences practices. Consultant utilization reached 77%, up from 76% a year earlier, while quarter-end consultant headcount increased 3.3% to 968.
CRAI's Guidance Gives Bulls More to Work With
Management raised fiscal 2026 constant-currency revenue guidance to $805-$820 million from $785-$805 million. The midpoint rose to $812.5 million from $795 million after the company generated $408.8 million of constant-currency revenues in the first half.
CRAI maintained its 12-13% non-GAAP EBITDA margin outlook. Keeping that profitability target while lifting the revenue range suggests management expects stronger activity to absorb part of the higher investment in talent.
Charles River's Costs Temper the Momentum
Costs of services increased to 71.3% of first-half fiscal 2026 revenues from 67.5% a year earlier. Non-GAAP EBITDA margin declined to 12.1% from 13%, while management expects forgivable-loan amortization to rise about $15 million in fiscal 2026.
Working capital is another constraint. CRAI ended the second quarter with $219 million of revolver borrowings, while days sales outstanding reached 113 days. First-half operating cash use was $118.3 million, making collections and cash conversion important tests for financial flexibility.
CRAI's Mixed Style Signals Call for Discipline
The 20% three-month gain is backed by broader demand, a healthier pipeline and higher revenue guidance, but the cost and working-capital picture argues against treating the recent advance as an all-clear signal. Execution on margins and collections remains central.
CRAI currently carries a Zacks Rank #3 (Hold). It has a Value Score of B, a Growth Score of F, a Momentum Score of D and a VGM Score of D. The favorable Value Score contrasts with weak Growth and Momentum readings. Because Style Scores complement the Zacks Rank, this mix supports a measured stance rather than a clear near-term buy signal. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
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CRAI Jumps 20% in 3 Months as Demand Broadens Across Key Practices
Key Takeaways
CRA International, Inc. (CRAI - Free Report) shares have gained 20% in the past three months, putting the focus on whether improving business momentum can support the advance. Second-quarter revenue growth, a broader project pipeline and higher fiscal 2026 guidance strengthen the operating case.
The counterweight is cost and balance-sheet pressure. Higher talent-related spending has weighed on first-half margins, while elevated receivables and revolver borrowings make cash conversion an important part of the outlook for investors after the recent rally.
CRAI's Revenue Momentum Broadens
Second-quarter revenues increased 12.8% year over year to $210.8 million. Eight practices representing 95% of revenues posted growth, showing that demand extended across much of Charles River's advisory portfolio.
Charles River Associates Revenue (TTM)
Charles River Associates revenue-ttm | Charles River Associates Quote
Legal & Regulatory revenues rose 10.1%, while Management Consulting advanced 25.5%. The broader consulting backdrop also remains active. Huron Consulting Group (HURN - Free Report) reported 16% second-quarter growth in revenues before reimbursable expenses, while FTI Consulting (FCN - Free Report) posted 5.3% revenue growth in the same period.
Charles River's Pipeline Supports Visibility
Average weekly project lead flow and new project originations increased at double-digit rates from the prior-year quarter. Those indicators matter because they point to replenishing demand rather than growth tied only to projects already underway.
Management also cited historically high conversion rates for new opportunities in the Energy and Life Sciences practices. Consultant utilization reached 77%, up from 76% a year earlier, while quarter-end consultant headcount increased 3.3% to 968.
CRAI's Guidance Gives Bulls More to Work With
Management raised fiscal 2026 constant-currency revenue guidance to $805-$820 million from $785-$805 million. The midpoint rose to $812.5 million from $795 million after the company generated $408.8 million of constant-currency revenues in the first half.
CRAI maintained its 12-13% non-GAAP EBITDA margin outlook. Keeping that profitability target while lifting the revenue range suggests management expects stronger activity to absorb part of the higher investment in talent.
Charles River's Costs Temper the Momentum
Costs of services increased to 71.3% of first-half fiscal 2026 revenues from 67.5% a year earlier. Non-GAAP EBITDA margin declined to 12.1% from 13%, while management expects forgivable-loan amortization to rise about $15 million in fiscal 2026.
Working capital is another constraint. CRAI ended the second quarter with $219 million of revolver borrowings, while days sales outstanding reached 113 days. First-half operating cash use was $118.3 million, making collections and cash conversion important tests for financial flexibility.
CRAI's Mixed Style Signals Call for Discipline
The 20% three-month gain is backed by broader demand, a healthier pipeline and higher revenue guidance, but the cost and working-capital picture argues against treating the recent advance as an all-clear signal. Execution on margins and collections remains central.
CRAI currently carries a Zacks Rank #3 (Hold). It has a Value Score of B, a Growth Score of F, a Momentum Score of D and a VGM Score of D. The favorable Value Score contrasts with weak Growth and Momentum readings. Because Style Scores complement the Zacks Rank, this mix supports a measured stance rather than a clear near-term buy signal. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.