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Why is CRA International (CRAI) Down 2.1% Since the Last Earnings Report?
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A month has gone by since the last earnings report for CRA International,Inc. (CRAI - Free Report) . Shares have lost about 2.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 catalysts.
CRA International Misses Q4 Earnings by a Whisker
CRA International reported solid fourth-quarter 2016 results with significant year-over-year improvement in revenues and earnings. GAAP earnings for the reported quarter were $2.1 million or $0.24 per share as against a net loss of $1.3 million or loss of $0.15 per share in the year-earlier quarter. The year-over-year increase in earnings was primarily due to higher revenues during the reported quarter and goodwill impairment charges in the year-ago quarter.
Non-GAAP earnings in the reported quarter were $2.1 million or $0.24 per share compared with $0.2 million or $0.03 per share in the year-ago quarter. Non-GAAP earnings marginally missed the Zacks Consensus Estimate by $0.01.
For full-year 2016, GAAP earnings improved to $12.9 million or $1.49 per share from $7.7 million or $0.83 per share in 2015. Non-GAAP earnings for 2016 were $11.5 million or $1.33 per share compared with $10.1 million or $1.10 per share in 2015.
Quarter Highlights
Non-GAAP revenues in the fourth quarter increased 11.2% year over year to $79.6 million. This performance was a result of broad-based growth in legal regulatory and management consulting lines of businesses. International operations also continued to deliver solid results, led by Antitrust & Competition Economics and Marakon practices. The reported revenues exceeded the Zacks Consensus Estimate of $76 million. For 2016, CRA International recorded non-GAAP revenues of $324 million compared with $299.8 million in 2015.
GAAP gross profit in the reported quarter was $23.5 million compared with $21.3 million in the year-ago quarter, with the respective margins being 29.5% and 29.4%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter increased 30.7% year over year to $12.9 million. Company-wide utilization in the quarter improved to 71% from 68% in the prior-year quarter, while headcount grew 5.7% year over year.
Acquisition
Subsequent to the end of the quarter, CRA International acquired C1 Consulting, a life sciences strategy consulting firm that helps pharmaceutical and biotech clients maximize their business potential through advanced analytics, customer insights, and therapy area expertise. The successful integration of the acquired firm will extend its capabilities in advanced analytics and market research as well as broaden its commercialization strategy offering, particularly relating to rare and orphan diseases. The transaction will also enable it to extend its geographic footprint with new offices in San Francisco, California, New Jersey and Lucerne, Switzerland. The deal is likely to be accretive to earnings in 2017.
Balance Sheet
At year-end 2016, CRA International had cash and cash equivalents of $53.5 million, while its long-term liabilities were $21.7 million compared with the respective tallies of $38.1 million and $16.2 million in the year-ago period.
Cash from operating activities for 2016 was $48.2 million compared with $20.4 million in 2015. During 2016, the company returned over $20 million to shareholders through share repurchases and dividends. This included $1.2 million in dividend payments and $19.1 million of repurchases of approximately 784,000 shares.
Outlook
For 2017, CRA International expects non-GAAP revenues of $350–$360 million on favorable growth dynamics. Non-GAAP adjusted EBITDA margin is expected in a 15.8–16.6% band.
Although CRA International recorded healthy demand, soft economic conditions and macroeconomic uncertainties continued to be headwinds. Proper integration of new hires remains an additional concern for the company.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
Currently, CRA International's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. 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.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Why is CRA International (CRAI) Down 2.1% Since the Last Earnings Report?
A month has gone by since the last earnings report for CRA International,Inc. (CRAI - Free Report) . Shares have lost about 2.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 catalysts.
CRA International Misses Q4 Earnings by a Whisker
CRA International reported solid fourth-quarter 2016 results with significant year-over-year improvement in revenues and earnings. GAAP earnings for the reported quarter were $2.1 million or $0.24 per share as against a net loss of $1.3 million or loss of $0.15 per share in the year-earlier quarter. The year-over-year increase in earnings was primarily due to higher revenues during the reported quarter and goodwill impairment charges in the year-ago quarter.
Non-GAAP earnings in the reported quarter were $2.1 million or $0.24 per share compared with $0.2 million or $0.03 per share in the year-ago quarter. Non-GAAP earnings marginally missed the Zacks Consensus Estimate by $0.01.
For full-year 2016, GAAP earnings improved to $12.9 million or $1.49 per share from $7.7 million or $0.83 per share in 2015. Non-GAAP earnings for 2016 were $11.5 million or $1.33 per share compared with $10.1 million or $1.10 per share in 2015.
Quarter Highlights
Non-GAAP revenues in the fourth quarter increased 11.2% year over year to $79.6 million. This performance was a result of broad-based growth in legal regulatory and management consulting lines of businesses. International operations also continued to deliver solid results, led by Antitrust & Competition Economics and Marakon practices. The reported revenues exceeded the Zacks Consensus Estimate of $76 million. For 2016, CRA International recorded non-GAAP revenues of $324 million compared with $299.8 million in 2015.
GAAP gross profit in the reported quarter was $23.5 million compared with $21.3 million in the year-ago quarter, with the respective margins being 29.5% and 29.4%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter increased 30.7% year over year to $12.9 million. Company-wide utilization in the quarter improved to 71% from 68% in the prior-year quarter, while headcount grew 5.7% year over year.
Acquisition
Subsequent to the end of the quarter, CRA International acquired C1 Consulting, a life sciences strategy consulting firm that helps pharmaceutical and biotech clients maximize their business potential through advanced analytics, customer insights, and therapy area expertise. The successful integration of the acquired firm will extend its capabilities in advanced analytics and market research as well as broaden its commercialization strategy offering, particularly relating to rare and orphan diseases. The transaction will also enable it to extend its geographic footprint with new offices in San Francisco, California, New Jersey and Lucerne, Switzerland. The deal is likely to be accretive to earnings in 2017.
Balance Sheet
At year-end 2016, CRA International had cash and cash equivalents of $53.5 million, while its long-term liabilities were $21.7 million compared with the respective tallies of $38.1 million and $16.2 million in the year-ago period.
Cash from operating activities for 2016 was $48.2 million compared with $20.4 million in 2015. During 2016, the company returned over $20 million to shareholders through share repurchases and dividends. This included $1.2 million in dividend payments and $19.1 million of repurchases of approximately 784,000 shares.
Outlook
For 2017, CRA International expects non-GAAP revenues of $350–$360 million on favorable growth dynamics. Non-GAAP adjusted EBITDA margin is expected in a 15.8–16.6% band.
Although CRA International recorded healthy demand, soft economic conditions and macroeconomic uncertainties continued to be headwinds. Proper integration of new hires remains an additional concern for the company.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
CRA International,Inc. Price and Consensus
CRA International,Inc. Price and Consensus | CRA International,Inc. Quote
VGM Scores
Currently, CRA International's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. 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.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.