CRA (CRAI) Soars to 52-Week High, Time to Cash Out?

Have you been paying attention to shares of CRA International (CRAI)? Shares have been on the move with the stock up 8.9% over the past month. CRAI hit a new 52-week high of $58.75 in the previous session. CRA International has gained 28.5% since the start of the year compared to the 18.4% move for the Zacks Business Services sector and the 12.7% return for the Zacks Consulting Services industry.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 2, 2018, CRA reported EPS of $0.67 versus consensus estimate of $0.54 while it beat the consensus revenue estimate by 5.64%.

For the current fiscal year, CRA is expected to post earnings of $2.28 per share on $405.2 million in revenues. This represents a 19.37% change in EPS on a 9.49% change in revenues. For the next fiscal year, the company is expected to earn $2.43 per share on $425.3 million in revenues. This represents a year-over-year change of 6.58% and 4.96%, respectively.

Valuation Metrics

CRA may be at a 52-week high right now, but what might the future hold for CRA? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

CRA has a Value Score of B. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 25.3X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 18.6X versus its peer group's average of 19.5X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, CRA currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if CRA passes the test. Thus, it seems as though CRA shares could have a bit more room to run in the near term.

How Does CRA Stack Up to the Competition?

Shares of CRA have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including Information Services Group (III), Robert Half International (RHI), and Broadridge Financial Solutions (BR), all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.

The Zacks Industry Rank is in the top 22% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CRA, even beyond its own solid fundamental situation.

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CRA International,Inc. (CRAI): Free Stock Analysis Report

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Broadridge Financial Solutions, Inc. (BR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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