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Why Charles River (CRAI) Stock is Up 4.2% Since Q3 Earnings

Zacks Equity Research

Shares of Charles River Associates CRAI have gained 4.2% since its third-quarter 2019 earnings release on Oct 31. The price increase can be attributed to the company’s better-than-expected results, raised revenue guidance for 2019 and increased quarterly cash dividend.

Quarterly non-GAAP EPS came in at 98 cents, which beat the Zacks Consensus estimate by 31 cents and increased 50.8% year over year. Revenues of $115.7 million surpassed the consensus mark by 5.2% and increased 11.4% year over year.

The company delivered double-digit year-over-year revenue growth in Antitrust & Competition Economics, Auctions & Competitive Bidding, Intellectual Property, Forensic Services, and Life Sciences practices.

Charles River raised its 2019 revenue guidance to the range of $446 million to $452 million from $430-$445 million expected previously. This updated guided range is above the Zacks Consensus Estimate of $439.1 million. The company expects non-GAAP EBITDA margin to be at the high end of the previously guided range of 9.2% to 10.2%.

Charles River increased its quarterly cash dividend by 15% from 20 cents to 23 cents per share.

Charles River Associates Price, Consensus and EPS Surprise

 

Charles River Associates Price, Consensus and EPS Surprise

Charles River Associates price-consensus-eps-surprise-chart | Charles River Associates Quote

Other Quarterly Details

The company delivered 76% utilization and headcount was up by 8.2%.

Geographically, revenues from North American and international operations grew 12.9% and 5.7% year over year, respectively.

Non-GAAP EBITDA increased 25.6% year over year to $12.6 million. Non-GAAP EBITDA margin increased 120 basis points (bps) year over year to 10.9%.

The company exited the third quarter with cash and cash equivalents of 19.8 million compared with $15.6 million at the end of the prior quarter. It generated $26.2 million of cash from operating activities and capex was 8.6 million.

In the quarter, Charles River returned $8.1 million of capital to shareholders, including $6.6 million for repurchases of roughly 157,000 shares and $1.5 million of dividend payouts.

Zacks Rank & Upcoming Releases

Currently, Charles River carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Investors interested in the broader Zacks Business Services sector are awaiting third-quarter 2019 earnings of key players like Fiserv FISV, ICF International ICFI and FLEETCOR Technologies FLT, each scheduled to release results on Nov 6.

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