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Why Is CRA (CRAI) Down 4.1% Since Last Earnings Report?

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A month has gone by since the last earnings report for CRA International (CRAI - Free Report) . Shares have lost about 4.1% 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 its most recent earnings report in order to get a better handle on the important drivers.

Charles River Beats Q1 Earnings Estimate

Charles River reported solid first-quarter 2020 results, with earnings and revenues beating the Zacks Consensus Estimate.

Non-GAAP EPS came in at 84 cents, which beat the Zacks Consensus Estimate by 31.3% and jumped 55.6% year over year. Revenues of $126.2 million surpassed the consensus mark by 8.6% and increased 19.2% year over year.

The company recorded the highest quarterly revenues in its history. It registered double-digit year-over-year revenue growth in Finance, Energy, Forensic Services and Labor & Employment practices.

Given the uncertainty regarding the duration of the coronavirus pandemic and extent of its impact on the company’s business, Charles River has withdrawn its 2020 guidance.

Other Quarterly Details

The company delivered 71% utilization and headcount was up by 16.3%. Non-GAAP EBITDA climbed 51.5% year over year to $12.9 million. Non-GAAP EBITDA margin shrunk 220 basis points (bps) year over year to 10.2%.

The company exited the first quarter with cash and cash equivalents of $15.8 million compared with $25.6 million witnessed at the end of the prior quarter. It generated $65.4 million of cash from operating activities and capex was $7.9 million. In the quarter, Charles River paid out $1.8 million of dividend and repurchased shares for $3.8 million.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -10.82% due to these changes.

VGM Scores

Currently, CRA has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

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

Outlook

CRA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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