A month has gone by since the last earnings report for CRA International (CRAI). Shares have added about 1.2% 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 its most recent earnings report in order to get a better handle on the important drivers.
Charles River Associates (CRAI) Beats Earnings Estimates in Q4
Charles River Associates delivered solid fourth-quarter 2018 results, with earnings and revenues surpassing the Zacks Consensus Estimate.
Non-GAAP earnings of 84 cents per share outpaced the consensus mark by 22 cents and increased 20% year over year. Revenues came in at $108.8 million, which beat the consensus mark by roughly $6 million and increased 12.1% year over year on an entirely organic basis.
The company reported double-digit year-over-year revenue growth in each of the trailing nine quarters. During the quarter, Charles River achieved company-wide utilization of 76% and headcounts increase of 9% year over year.
Quarter Details
In terms of services offered, legal and regulatory as well as management consulting delivered solid results. This impressive performance can be attributed to double-digit year-over-year growth in Finance, Energy, Forensic Services, and Life Sciences practices. Solid contributions came from Antitrust & Competition Economics practice. Geographically, revenues from North American and European operations grew 9% and 26% year over year, respectively.
In the reported quarter, non-GAAP EBITDA increased 28.9% year over year to $11.5 million. Non-GAAP EBITDA margin expanded 140 basis points (bps) year over year to 10.6%. The company exited the fourth quarter with cash and cash equivalents of $38 million compared with $11.9 million at the end of the prior quarter. Notably, the company generated $44.6 million of cash in operating activities and spent 2.1 million in capex.
Dividend and Share Repurchase
In the quarter, Charles River returned $9.3 million of capital to shareholders, including $7.5 million for share repurchases of roughly 163,000 shares and $1.8 million of dividend payments.
Concurrent with the earnings release, the company announced a quarterly cash dividend of 20 cents per share, payable on Mar 22, 2019 to shareholders of record as of Mar 12, 2019. The company has expanded its share repurchase program by $20 million in addition to the $1.6 million remaining under its existing program.
2019 Guidance
On a constant-currency basis relative to fiscal 2018, the company expects revenues in the range of $430-$445 million and non-GAAP EBITDA margin in the range of 9.2-10.2%.
How Have Estimates Been Moving Since Then?
Fresh estimates followed an upward path over the past two months. The consensus estimate has shifted 10.91% due to these changes.
VGM Scores
Currently, CRA has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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
CRA has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Charles River Associates (CRAI): Free Stock Analysis Report
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