CRA currently trades at $182.84 per share and has shown little upside over the past six months, posting a small loss of 3.1%.
Is there a buying opportunity in CRA, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Is CRA Not Exciting?
We don't have much confidence in CRA. Here are two reasons why you should be careful with CRAI and a stock we'd rather own.
1. Fewer Distribution Channels Limit its Ceiling
With $697.5 million in revenue over the past 12 months, CRA is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand.
2. Free Cash Flow Margin Dropping
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
As you can see below, CRA’s margin dropped by 11 percentage points over the last five years. If its declines continue, it could signal increasing investment needs and capital intensity. CRA’s free cash flow margin for the trailing 12 months was 2.3%.
Final Judgment
CRA isn’t a terrible business, but it isn’t one of our picks. That said, the stock currently trades at 22.9× forward P/E (or $182.84 per share). This multiple tells us a lot of good news is priced in - we think there are better stocks to buy right now. We’d recommend looking at an all-weather company that owns household favorite Taco Bell.
Stocks We Would Buy Instead of CRA
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