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CRA (CRAI) Down 5.3% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for CRA International (CRAI - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is CRA due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Charles River Associates Beats Q2 Earnings Estimates

Charles River Associates delivered mixed second-quarter 2019 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.

Non-GAAP earnings of 73 cents per share surpassed the consensus mark by 2 cents and increased 9% year over year. Revenues came in at $110.6 million, which missed the consensus mark by $0.3 million but increased 4.8% year over year.

The year-over-year improvement in results was driven by strength across Financial Economics, Antitrust & Competition Economics, Auctions & Competitive Bidding, Intellectual Property, Forensic Services and Life Sciences practices.

Other Quarterly Details

The company delivered 77% utilization and headcount was up by 5.7%.Geographically, revenues from North American and European operations grew 2% and 16% year over year, respectively.

In the quarter, non-GAAP EBITDA increased 8.7% year over year to $11.7 million. Non-GAAP EBITDA margin increased 40 basis points (bps) year over year to 10.6%.

The company exited the second quarter with cash and cash equivalents of 15.6 million compared with $15 million at the end of the prior quarter. It generated $10.5 million of cash from operating activities and capex was 3.1 million.

In the quarter, Charles River returned $8.8 million of capital to shareholders, including $7.2 million for repurchases of roughly 177,000 shares and $1.6 million of dividend payments.

2019 Guidance

Management reiterated 2019 guidance.  On a constant-currency basis relative to fiscal 2018, revenues are expected in the range of $430-$445 million and non-GAAP EBITDA margin in the range of 9.2-10.2%.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a flat path over the past two months.

VGM Scores

Currently, CRA has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

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

Outlook

CRA has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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