Company Overview
CRA International, Inc. operates as a global provider of economic, financial, and management consulting services, assisting clients with litigation support, regulatory proceedings, and corporate business strategy. The company functions within the Industrials sector, specifically serving the Consulting Services industry, where it delivers specialized expertise to navigate complex economic and financial matters. In terms of scale, the organization employs 959 people and holds a market capitalization of $1.01B, generating annual revenue of $751.58M. These valuation and revenue figures indicate that CRA International maintains a substantial market presence as a mid-to-large-cap player in the professional services landscape, reflecting a significant operational footprint relative to its peer group in the consulting space.
Financial Health
The company reported revenue of $751.58M for the trailing twelve months, with net income of $54.68M and EBITDA of $97.26M, highlighting a structural relationship where operating earnings are significantly higher than net income. The gap between revenue and net income reveals a cost structure where approximately 29.1% of revenue is consumed by expenses beyond the cost of goods sold, including taxes, interest, and administrative costs. Free cash flow stands at $84.04M, which provides the organization with substantial financial flexibility to fund operations, service debt obligations, or return capital to shareholders without compromising liquidity. Profitability is assessed through three key margins: a gross margin of 30.9%, an operating margin of 10.5%, and a profit margin of 7.3%, indicating that the company retains roughly one-seventh of its revenue as bottom-line profit after all operational and non-operational expenses. Liquidity and leverage are further analyzed by comparing cash assets of $18.21M against total debt of $127.23M, resulting in a debt-to-equity ratio of 59.57, which suggests a leveraged balance sheet where debt exceeds equity. Short-term liquidity is constrained by a current ratio of 0.92, indicating that current liabilities slightly exceed current assets, which may require careful cash management to meet immediate obligations. Management effectiveness is quantified by a return on equity of 25.7% and a return on assets of 8.7%, demonstrating that the company generates significantly higher returns on shareholder capital than on its total asset base.
Valuation Assessment
Valuation metrics indicate that the market prices CRA International shares at a trailing P/E ratio of 18.84 and a forward P/E of 16.13, implying that the market expects earnings to expand in the coming period as the forward multiple is lower than the trailing multiple. The price-to-book ratio stands at 4.69, signaling that the market assigns a significant premium to the company's intangible assets, human capital, and future earning potential over its recorded book value. Alternative valuation measures include a price-to-sales ratio of 1.34 and an EV/EBITDA of 11.46, which suggest the company is valued at approximately 1.3 times its sales and roughly 11.5 times its unlevered earnings, providing a comprehensive view of its relative cost. The stock has traded between a 52-week low of $149.96 and a 52-week high of $227.29, meaning the current price sits within this established range and reflects recent market volatility. Price volatility relative to the broader market is moderated by a beta of 0.83, indicating that the stock tends to move with less intensity than the overall market index during periods of fluctuation.
Growth & Income
Revenue growth for the trailing twelve months stands at 11.6%, while earnings growth is recorded at -9.1%, illustrating that earnings are currently contracting at a much faster rate than revenue is expanding. This divergence implies that despite top-line expansion, underlying profitability is being pressured by cost increases, margin compression, or one-time charges not yet reflected in the full revenue figure. The company pays a dividend with a yield of 1.5% and maintains a payout ratio of 25.1%, suggesting that the dividend is currently well-covered by earnings and is sustainable given the company's current profitability levels. The overall growth and income profile characterizes CRA International as a firm in a transition phase where revenue expansion is occurring but earnings stability is being challenged, yet it continues to provide a modest income stream to shareholders through its dividend policy.