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Charles River (CRAI) Up on Diversified Business Amid Talent Cost

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CRA International, Inc., which conducts business as Charles River Associates CRAI, has had an impressive run on the bourses over the past year. The stock gained 26.6%, outperforming the 23.4% growth of the industry it belongs to.

The company recently reported fourth-quarter 2021 results, with non-GAAP EPS of $1.14 beating the Zacks Consensus Estimate by 8.6% and increasing 20% year over year. Revenues of $134.8 million lagged the consensus mark by 2.4% and decreased 1.9% year over year.

Charles River Associates Price

Charles River Associates Price
Charles River Associates Price

Charles River Associates price | Charles River Associates Quote

How is CRAI Doing?

Charles River has a diversified business with service offerings across areas of functional expertise, client base and geographical regions. Being proficient in multiple industries helps the company meet varying client needs and offer innovative services. The multidisciplinary set up enables it to bring experts from all fields under one platform.

Diversification in its business helps reduce Charles River’s dependence on any specific market, industry or geographic area. It also increases the company’s ability to adapt to changing conditions. A strong international presence provides the company the opportunity to work with the world’s leading professionals on multiple issues.

Charles River has a consistent record of returning value to shareholders in the form of dividends and share repurchases. In 2021, 2020 and 2019, the company repurchased shares worth $44.9 million, $13.4 million and $18.1 million, respectively. It paid $8.29 million, $7.50 million and $6.54 million in dividends during 2021, 2020 and 2019, respectively. Such moves indicate the company’s commitment to creating value for shareholders and underline its confidence in its business.

Higher talent costs due to a competitive talent market are hurting consulting services companies like Charles River. The industry is labor intensive and heavily dependent on foreign talent. Moreover, while advancement in automation and AI offers massive opportunities to the industry, these technologies enable clients to comprehend and integrate new methods to improve performance, thereby creating uncertainty for consulting services firms.

Zacks Rank and Stocks to Consider

Charles River currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Business Services sector that investors may consider are Cross Country Healthcare CCRN, NV5 Global NVEE and Clean Harbors CLH.

Cross Country Healthcare sports a Zacks Rank #1 (Strong Buy). The company has a long-term earnings growth of 6.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cross Country Healthcare delivered a trailing four-quarter earnings surprise of 41.5%, on average. CCRN’s shares have surged 77.6% in the past year.

NV5 Global also carries a Zacks Rank #1. The company has an expected earnings growth rate of 6.1% for the current year. It delivered a trailing four-quarter earnings surprise of 22.2%, on average.

NV5 Global’s shares have surged 44.6% in the past year. The company has a long-term earnings growth of 14.2%.

Clean Harbors carries a Zacks Rank #1. The company pulled off a trailing four-quarter earnings surprise of 43.2%, on average.

CLH’s shares have jumped 24% in the past year.


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Charles River Associates (CRAI) : Free Stock Analysis Report

Clean Harbors, Inc. (CLH) : Free Stock Analysis Report

Cross Country Healthcare, Inc. (CCRN) : Free Stock Analysis Report

NV5 Global, Inc. (NVEE) : Free Stock Analysis Report

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