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Charles River Gains 75.8% in a Year: What's Driving the Rally?
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Key Takeaways
Charles River shares rose 75.8% in a year, outpacing its industry and the S&P 500.
CRL's RMS organic revenue decline narrowed to 1.4% in Q2 2026 as NHP shipment timing normalized.
Charles River generated $220.8M in first-half operating cash flow and repurchased $300M of stock.
Charles River Laboratories International (CRL - Free Report) has witnessed strong momentum over the past year. Shares of the company have risen 75.8%, outperforming the industry’s 10.5% growth. The S&P 500 composite has increased 16.1% during the same time frame.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #3 (Hold) company appears to be a solid wealth creator for its investors at the moment.
Charles River is a full-service, early-stage contract research organization, headquartered in Wilmington, MA. The company provides essential products and services to help pharmaceutical and biotechnology companies, government agencies and leading academic institutions globally accelerate their research and drug development efforts. It has a diverse portfolio of discovery and safety assessment services, both Good Laboratory Practice (“GLP”) and non-GLP. Charles River currently has three reporting segments — Discovery and Safety Assessment (“DSA”), Research Models and Services (“RMS”) and Manufacturing Solutions.
Factors Favoring CRL’s Share Price Growth
Charles River’s share price is trending upward, prompted by bright RMS prospects. In the second quarter of 2026, RMS organic revenues declined 1.4%, marking an improvement from the 5.5% decline in the first quarter as NHP shipment timing normalized. The CRADL model continues to offer clients flexible vivarium capacity without requiring internal infrastructure, preserving a capital-efficient value proposition as clients manage research spending.
Charles River’s gradual, long-term shift toward broader adoption of new approach methodologies looks encouraging. In line with this, PathoQuest has added next-generation sequencing capabilities for in vitro testing and a new Arovella Therapeutics collaboration extends those capabilities into cell and gene therapy programs. Charles River also joined Eli Lilly’s TuneLab platform to contribute non-clinical testing expertise to AI and machine-learning drug discovery. Internally, its enhanced digital pathology workflow uses AI to shorten study timelines and increase pathologist efficiency, with management targeting at least one week of time savings for fully integrated users.
From solvency view point, the company ended the second quarter of 2026 with $192 million of cash and cash equivalents compared with $213.8 million as of year-end 2025. Long-term debt and finance leases totaled $2.62 billion, while the debt-to-capital ratio was 47.9%. CRL generated $220.8 million of operating cash flow in the first half of 2026. It also repurchased $300 million of stock during the period, leaving $700 million under its authorization while continuing to fund acquisitions, organic investment and debt repayment.
Factors That May Offset CRL’s Gains
Charles River’s demand environment is recovering, but unevenly across client groups and end markets. In the second quarter of 2026, small and midsized biotech revenues were essentially flat organically, while global biopharma revenues grew organically.
Management noted that projects typically take several quarters to convert from bookings into revenues, limiting the near-term benefit of improved funding and proposal activity. DSA trends are improving, but the recovery remains gradual and uneven. As a result, revenue and margin recovery remains sensitive to study starts, client budgets and the timing of spending.
Image Source: Zacks Investment Research
The company’s 2026 guidance includes a 0.5% to 1% favorable foreign-exchange contribution. The gap shows that currency and portfolio effects can move reported growth away from underlying demand. Given the company’s international footprint, exchange-rate swings can continue to complicate period-to-period comparisons and reported growth trends.
Estimates for CRL
The Zacks Consensus Estimate for 2026 earnings has moved north 0.3% to $11.34 in the past 30 days.
The company has an estimated long-term EPS growth rate of 9.4% compared with the industry’s 13.2% growth.
Veracyte has an earnings yield of 4.7% against the industry’s negative 1.4% yield. Shares of the company have risen 28.2% against the industry’s 3.8% decline. VCYT’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 41.8%.
Globus Medical, flaunting a Zacks Rank #1 at present, has an earnings yield of 6.7% against the industry’s negative 1.4% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 27.9%. GMED shares have rallied 27.3% against the industry’s 3.8% decline over the past year.
Teleflex, currently carrying a Zacks Rank #2 (Buy), has an estimated long-term earnings growth rate of 20.7% compared with the industry’s 14.5% growth. Its earnings beat estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 3.2%. TFX shares have gained 4% against the industry’s 3.7% decline over the past year.
View the Zacks #1 Rank List
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Charles River Gains 75.8% in a Year: What's Driving the Rally?
Key Takeaways
Charles River Laboratories International (CRL - Free Report) has witnessed strong momentum over the past year. Shares of the company have risen 75.8%, outperforming the industry’s 10.5% growth. The S&P 500 composite has increased 16.1% during the same time frame.
With healthy fundamentals and strong growth opportunities, this Zacks Rank #3 (Hold) company appears to be a solid wealth creator for its investors at the moment.
Charles River is a full-service, early-stage contract research organization, headquartered in Wilmington, MA. The company provides essential products and services to help pharmaceutical and biotechnology companies, government agencies and leading academic institutions globally accelerate their research and drug development efforts. It has a diverse portfolio of discovery and safety assessment services, both Good Laboratory Practice (“GLP”) and non-GLP. Charles River currently has three reporting segments — Discovery and Safety Assessment (“DSA”), Research Models and Services (“RMS”) and Manufacturing Solutions.
Factors Favoring CRL’s Share Price Growth
Charles River’s share price is trending upward, prompted by bright RMS prospects. In the second quarter of 2026, RMS organic revenues declined 1.4%, marking an improvement from the 5.5% decline in the first quarter as NHP shipment timing normalized. The CRADL model continues to offer clients flexible vivarium capacity without requiring internal infrastructure, preserving a capital-efficient value proposition as clients manage research spending.
Charles River’s gradual, long-term shift toward broader adoption of new approach methodologies looks encouraging. In line with this, PathoQuest has added next-generation sequencing capabilities for in vitro testing and a new Arovella Therapeutics collaboration extends those capabilities into cell and gene therapy programs. Charles River also joined Eli Lilly’s TuneLab platform to contribute non-clinical testing expertise to AI and machine-learning drug discovery. Internally, its enhanced digital pathology workflow uses AI to shorten study timelines and increase pathologist efficiency, with management targeting at least one week of time savings for fully integrated users.
From solvency view point, the company ended the second quarter of 2026 with $192 million of cash and cash equivalents compared with $213.8 million as of year-end 2025. Long-term debt and finance leases totaled $2.62 billion, while the debt-to-capital ratio was 47.9%. CRL generated $220.8 million of operating cash flow in the first half of 2026. It also repurchased $300 million of stock during the period, leaving $700 million under its authorization while continuing to fund acquisitions, organic investment and debt repayment.
Factors That May Offset CRL’s Gains
Charles River’s demand environment is recovering, but unevenly across client groups and end markets. In the second quarter of 2026, small and midsized biotech revenues were essentially flat organically, while global biopharma revenues grew organically.
Management noted that projects typically take several quarters to convert from bookings into revenues, limiting the near-term benefit of improved funding and proposal activity. DSA trends are improving, but the recovery remains gradual and uneven. As a result, revenue and margin recovery remains sensitive to study starts, client budgets and the timing of spending.
Image Source: Zacks Investment Research
The company’s 2026 guidance includes a 0.5% to 1% favorable foreign-exchange contribution. The gap shows that currency and portfolio effects can move reported growth away from underlying demand. Given the company’s international footprint, exchange-rate swings can continue to complicate period-to-period comparisons and reported growth trends.
Estimates for CRL
The Zacks Consensus Estimate for 2026 earnings has moved north 0.3% to $11.34 in the past 30 days.
The company has an estimated long-term EPS growth rate of 9.4% compared with the industry’s 13.2% growth.
Stocks to Consider
Some better-ranked stocks in the broader medical space are Veracyte (VCYT - Free Report) , Globus Medical (GMED - Free Report) and Teleflex (TFX - Free Report) .
Veracyte has an earnings yield of 4.7% against the industry’s negative 1.4% yield. Shares of the company have risen 28.2% against the industry’s 3.8% decline. VCYT’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 41.8%.
VCYT sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Globus Medical, flaunting a Zacks Rank #1 at present, has an earnings yield of 6.7% against the industry’s negative 1.4% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 27.9%. GMED shares have rallied 27.3% against the industry’s 3.8% decline over the past year.
Teleflex, currently carrying a Zacks Rank #2 (Buy), has an estimated long-term earnings growth rate of 20.7% compared with the industry’s 14.5% growth. Its earnings beat estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 3.2%. TFX shares have gained 4% against the industry’s 3.7% decline over the past year.