CRA (CRAI) Up 0.5% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for CRA International (CRAI). Shares have added about 0.5% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is CRA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Charles River Beats Q2 Earnings Estimate

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

Non-GAAP EPS came in at 80 cents, which beat the Zacks Consensus Estimate by 48.2% and jumped 9.6% year over year. Revenues of $123 million surpassed the consensus mark by 10.4% and increased 11.3% year over year.

The company recorded the highest second-quarter revenues in its history. It registered double-digit year-over-year revenue growth in Finance, Forensic Service and Life Sciences practices.

The company delivered 66% utilization and headcount was up by 20.8% year over year. Non-GAAP EBITDA climbed 2% year over year to $11.9 million. Non-GAAP EBITDA margin shrunk 90 basis points (bps) year over year to 9.7%.

The company exited the second quarter with cash and cash equivalents of $18.8 million compared with $15.8 million witnessed at the end of the prior quarter. It used $21.1 million of cash in operating activities and capex was $5.6 million. In the quarter, Charles River paid out $1.8 million of dividend.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -10.99% due to these changes.

VGM Scores

At this time, CRA has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

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

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, CRA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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