A month has gone by since the last earnings report for Charles River Laboratories (CRL Quick QuoteCRL - Free Report) . Shares have added about 10.5% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Charles River due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Charles River Laboratories International, Inc. before we dive into how investors and analysts have reacted as of late.

CRL Q2 Earnings and Revenues Top, '26 View Up

Charles River reported second-quarter 2026 company-defined non-GAAP earnings of $3.02 per share, down 3.2% year over year. The reported earnings topped the Zacks Consensus Estimate by 11.0%.

GAAP net loss was 3 cents per share compared to GAAP earnings of $1.06 per share in the year-ago period.

Revenues of $1 billion declined 2.7% (up 0.1% organically) year over year but beat the Zacks Consensus Estimate by 3%. 

Charles River's DSA Business Shows Demand Gains

DSA revenues totaled $606.5 million, down 1.9% year over year on a reported basis. Organic revenues increased 0.2%, driven mainly by higher study volume for regulated safety assessment services.

The segment's GAAP operating margin rose 60 basis points to 20.5%, aided by lower intangible-asset amortization and reduced third-party legal costs tied to a non-human primate supply matter. The non-GAAP margin fell 180 basis points to 25.6% because of higher study-related direct costs.

CRL's RMS Sales Decline on North America Weakness

RMS revenues totaled $209.5 million, down 1.8% from the year-ago quarter’s level. Organic revenues declined 1.4% primarily due to lower sales of small research models in North America and weaker research model services, partly offset by growth in China.

The segment's GAAP operating margin improved 50 basis points to 17.3%, mainly because of lower amortization following the Cell Solutions divestiture. The non-GAAP margin contracted 80 basis points to 24.5% on lower volume and an unfavorable geographic revenue mix.

Charles River's Manufacturing Margins Expand

Manufacturing revenues amounted to $188.1 million, down 6.3% year over year, mainly because of the CDMO divestiture. Organic revenues rose 1.3%, supported by higher revenues in the Microbial Solutions business.

GAAP operating margin surged to 34.9% from 6% a year earlier. The non-GAAP margin expanded 500 basis points to 37.8%, with the CDMO business and the benefit from its divestiture driving the improvement.

CRL's Margin Performance

The gross profit in the reported quarter was $363.4 million, up 1.8% from the prior-year quarter’s level. The gross margin of 36.2% expanded approximately 159 basis points (bps) year over year.

Selling, general and administrative expenses increased 19.5% year over year to $228.9 million. Operating profit totaled $119.9 million, up 19.7% from the prior-year quarter’s level. The operating margin expanded approximately 224 bps to 11.9%.

 CRL's Cash Flow and Buyback Activity

Cash and cash equivalents amounted to $192 million as of June 27, 2026, compared with $191.8 million at the end of the first quarter. Cumulative net cash provided by operating activities at the end of the quarter was $220.8 million compared with $376.3 million a year ago.

CRL repurchased 0.6 million shares for $100 million during the second quarter at an average price of $174 per share. Year-to-date repurchases totaled $300 million, leaving $700 million available under the company's authorization.

Charles River Raises Its 2026 Outlook

Charles River now expects reported revenues to decline 3.5% to 2.5% in 2026, compared with its prior projection for a 5.5% to 4% decrease. The Zacks Consensus Estimate for 2026 revenues implies a decline of 3% year over year. 

The company raised its non-GAAP earnings guidance to $11.15-$11.45 per share from $10.80-$11.30. The Zacks Consensus Estimate for the metric is pegged at $11.28 per share.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates revision.

VGM Scores

Currently, Charles River has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a score of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Charles River has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Charles River is part of the Zacks Medical Services industry. Over the past month, HCA Healthcare (HCA Quick QuoteHCA - Free Report) , a stock from the same industry, has gained 0.1%. The company reported its results for the quarter ended June 2026 more than a month ago.

HCA reported revenues of $20.23 billion in the last reported quarter, representing a year-over-year change of +8.7%. EPS of $7.59 for the same period compares with $6.84 a year ago.

HCA is expected to post earnings of $6.80 per share for the current quarter, representing a year-over-year change of -2.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.8%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for HCA. Also, the stock has a VGM Score of B.