Strong Liquidity Aids Charles River (CRAI) Amid Cost Woes
CRA International, Inc. CRAI, which conducts business as Charles River Associates, is gaining from a strong liquidity position. However, rising talent costs raise a concern.
Charles River Associates reported lower-than-expected third-quarter 2023 results. Non-GAAP earnings per share (EPS) were $1.13, which missed the Zacks Consensus Estimate by 18.1% and decreased 31.1% year over year. Revenues of $147.6 million lagged the consensus mark by 6.6% and declined slightly year over year.
How is CRAI Doing?
Charles River has been consistently returning value to its shareholders in the form of dividends and share purchases. In 2022, 2021, and 2020, the company repurchased shares worth $27.6 million, $44.9 million and $13.4 million, respectively. It paid $9.58 million, $8.29 million and $7.50 million as dividends during 2022,2021 and 2020, respectively. Such moves indicate the company’s commitment to create value for shareholders and underline its confidence in its business.
Charles River's current ratio at the end of third-quarter 2023 was pegged at 1.11, higher than the current ratio of 1.07 reported at the end of the previous quarter. The current ratio of more than 1 indicates the company is less likely to face any issue to meet its short-term obligations.
Charles River Associates Shareholders Equity (Quarterly)
Charles River Associates shareholders-equity-quarterly | Charles River Associates Quote
Charles River remains challenged by elevated talent costs in the face of intense competition for skilled professionals in the job market. Given the labor-intensive nature of the industry, a substantial reliance on foreign talent further compounds this challenge.
The company is at risk of being affected by changes in foreign exchange rates due to the nature of its business. It is exposed to the ups and downs of foreign currency values, especially concerning short-term intercompany balances, accounts receivable and cash held in dollars or euros in the United Kingdom.
CRAI currently has a Zacks Rank #5(Strong Sell).
Stocks to Consider
Here are a few better-ranked stocks from the Business Services sector that may be considered:
Fiserv (FI): The Zacks Consensus Estimate of Fiserv’s 2023 revenues indicates 8.1% growth from the year-ago figure while earnings are expected to grow by 15.4%. The company has beaten the consensus estimate in two of the past four quarters while matching in the other two instances, with an average surprise of 0.6%.
The company holds a Zacks Rank #3 (Hold) and has a VGM Score of B.
DocuSign DOCU: The Zacks Consensus Estimate of DocuSign’s 2023 revenues indicates 8.6% growth from the year-ago figure, while earnings are expected to grow by 29.1%. The company has beaten the consensus estimate in all four quarters, with an average surprise of 27.1%.
The company holds a Zacks Rank of 2 (Buy) and has a VGM Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
Broadridge Financial Solutions BR: The Zacks Consensus Estimate of Broadridge’s 2023 revenues indicates 7.7% growth from the year-ago figure, while earnings are expected to grow by 10.1%. The company has beaten the consensus estimate in three of the past four quarters and matched on one instance, with an average surprise of 5.4%.
BR holds a Zacks Rank of 2.
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