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Charles River Laboratories Intl (CRL)
NYSE:CRL
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Charles River Labs
(NYSE:CRL)
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Rating:56Neutral
Price Target:
$161.00
▼(-9.21% Downside)
The overall stock score of 56 reflects strong revenue growth and cash flow generation, but significant profitability challenges and a negative P/E ratio weigh heavily on the valuation. Technical indicators suggest a neutral trend, while the earnings call provides a cautiously optimistic outlook with signs of stabilization.
Positive Factors
Revenue Growth
The slight increase in revenue reflects the company's ability to maintain growth despite challenges, indicating resilience and potential for future expansion.
Cash Flow Generation
Strong cash flow generation enhances financial flexibility and supports reinvestment in growth initiatives, ensuring long-term sustainability.
Operational Improvements
Improved operating margins through cost savings indicate enhanced efficiency, contributing to better profitability and competitive positioning.
Negative Factors
Profitability Challenges
Ongoing profitability issues, as indicated by negative margins, could hinder the company's ability to invest in growth and maintain competitive advantage.
Leadership Changes
The resignation of the CFO may lead to strategic uncertainties and potential disruptions in financial management, affecting long-term planning.
DSA Segment Decline
A decline in a key segment's revenue suggests challenges in maintaining demand, which could impact overall growth and market position.
Charles River Labs (CRL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.63B
Dividend YieldN/A
Average Volume (3M)899.34K
Price to Earnings (P/E)449.9
Beta (1Y)0.66
Revenue Growth-1.21%
EPS Growth-115.44%
CountryUS
Employees18,700
SectorHealthcare
Sector Strength45
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)3.12
Shares Outstanding49,214,176
10 Day Avg. Volume1,109,074
30 Day Avg. Volume899,342
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.16
Enterprise Value/Revenue2.49
Enterprise Value/Gross Profit7.68
Enterprise Value/Ebitda19.02
Forecast
1Y Price Target
$176.33Price Target Upside-0.56% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Charles River Labs Business Overview & Revenue Model
Company DescriptionCharles River Laboratories International, Inc., a non-clinical contract research organization, provides drug discovery, non-clinical development, and safety testing services in the United States, Europe, Canada, the Asia Pacific, and internationally. It operates through three segments: Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Solutions (Manufacturing). The RMS segment produces and sells rodent research model strains and purpose-bred rats and mice for use by researchers. This segment also provides a range of services to assist its clients in supporting the use of research models in research and screening non-clinical drug candidates, including research models, genetically engineered models and services, insourcing solutions, and research animal diagnostic services. The DSA segment offers early and in vivo discovery services for the identification and validation of novel targets, chemical compounds, and antibodies through delivery of non-clinical drug and therapeutic candidates ready for safety assessment; and safety assessment services, such as toxicology, pathology, safety pharmacology, bioanalysis, drug metabolism, and pharmacokinetics services. The Manufacturing segment provides in vitro methods for conventional and rapid quality control testing of sterile and non-sterile pharmaceuticals and consumer products. This segment also offers specialized testing of biologics that are outsourced by pharmaceutical and biotechnology companies; and avian vaccine services that provide specific-pathogen-free (SPF) fertile chicken eggs, SPF chickens, and diagnostic products used to manufacture vaccines. The company also provides contract vivarium operation services to biopharmaceutical clients. Charles River Laboratories International, Inc. was founded in 1947 and is headquartered in Wilmington, Massachusetts.
How the Company Makes MoneyCharles River Labs generates revenue through a diversified model that includes multiple key streams. The primary revenue comes from its services, which encompass preclinical services such as safety assessment, laboratory animal services, and research models, as well as clinical services that assist in the later stages of drug development. The company also earns revenue from selling research models and related products. Significant partnerships with pharmaceutical and biotechnology companies enhance CRL's earnings by providing steady contracts for research and development services. Additionally, the company occasionally engages in collaborations or joint ventures that can lead to new revenue opportunities. Overall, CRL's strong reputation and extensive service offerings position it as a reliable partner for clients in the drug development process.
Charles River Labs Key Performance Indicators (KPIs)
Any
Revenue by Type
Categorizes revenue by type, such as services or products, providing insight into the company's business model and potential areas for expansion.
Categorizes revenue by type, such as services or products, providing insight into the company's business model and potential areas for expansion.
Data provided by:
Main Street Data
Main Street DataCharles River Labs Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted a solid financial performance with increased revenue and earnings per share, driven by operational improvements and favorable FX rates. The DSA segment showed signs of stabilization, but challenges remain with decreased DSA revenue and increased cancellations. The CDMO segment faced a revenue headwind due to the end of a commercial relationship. Despite these challenges, the company's strategic review and cost reductions are on track to deliver significant savings. Overall, the sentiment reflects a cautious optimism with signs of stabilization but ongoing challenges.Q2-2025 Updates
Positive Updates
Revenue and Earnings Outperformance
Charles River Laboratories reported Q2 2025 revenue of $1.03 billion, a 0.6% increase over last year, and an EPS of $3.12, an 11.4% increase year-over-year, driven by operational improvements and favorable FX rates.
DSA Segment Stability
The DSA business showed signs of stabilization with a 6% and 13% increase in first half gross and net bookings, respectively. The net book-to-bill improved from 0.80x in H1 2024 to 0.93x in H1 2025.
Strong Operating Margin
Operating margin increased by 80 basis points to 22.1% due to cost savings and better-than-expected sales volumes.
Positive NHP Supply Update
The Department of Interior cleared NHP shipments from Cambodia for legal entry into the U.S., improving operational flexibility and planning.
Strategic Review and Cost Reductions
Ongoing strategic review and restructuring program on track to deliver $175 million in cost savings for 2025, with $225 million expected in 2026.
Negative Updates
Decline in DSA Revenue
DSA segment revenue declined by 2.4% year-over-year on an organic basis, driven by lower revenue for discovery and safety assessment services.
Challenges in CDMO Segment
The CDMO segment faced a revenue and margin headwind due to the end of a commercial relationship, which contributed $20 million in the first half.
Increased Cancellations
There was an increase in DSA cancellations, particularly in longer-term post-IND work, leading to a net book-to-bill of 0.82x in Q2 2025.
Flat Organic Revenue Outlook
Despite an improved outlook, the company expects a 1% to 3% organic revenue decline for 2025, indicating continued uncertainty in demand.
Company Guidance
During the Charles River Laboratories second quarter 2025 earnings call, the company provided updated financial guidance, indicating a positive outlook for the remainder of the year. Revenue for the second quarter was reported at $1.03 billion, a slight increase of 0.6% over the previous year, with favorable foreign exchange movements contributing to this performance. The DSA segment, which experienced a 6% increase in gross bookings and a 13% increase in net bookings for the first half, was a key driver in raising the full-year financial guidance. The company now expects organic revenue to decline by 1% to 3% for the year, an improvement from prior expectations, with non-GAAP earnings per share guidance raised by $0.55 at midpoint to a range of $9.90 to $10.30. The operating margin for the quarter was 22.1%, an increase from the previous year, primarily due to cost savings and better-than-expected sales volumes. Charles River Laboratories also noted that the demand environment is stabilizing, with global biopharmaceutical and biotech segments showing signs of improvement, although smaller biotechs remain cash constrained.Charles River Labs Financial Statement Overview
Summary
Charles River Labs shows strong revenue growth and cash flow generation, but faces profitability challenges with a negative net income TTM. The balance sheet shows improved leverage, but the negative return on equity highlights ongoing profitability issues. The company needs to focus on improving operational efficiency and profitability to enhance its financial health.Income Statement
The income statement shows mixed results. The TTM data reveals a negative net profit margin of -1.72%, indicating a loss, which is a significant decline from the previous year's positive margin. Revenue growth is strong at 15% TTM, but the gross profit margin has decreased to 23.61% from 32.88% in the previous year. The EBIT and EBITDA margins have also declined, reflecting reduced operational efficiency.45
Neutral
Balance Sheet
The balance sheet indicates moderate stability with a debt-to-equity ratio of 0.83 TTM, which is an improvement from the previous year. However, the return on equity is negative at -2.01% TTM, highlighting profitability challenges. The equity ratio remains stable, suggesting a balanced asset structure.55
Neutral
Cash Flow
Cash flow analysis shows a robust free cash flow growth rate of 270.9% TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is healthy at 0.73, suggesting efficient cash conversion. However, the free cash flow to net income ratio indicates reliance on cash flow rather than profitability.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.03B | 4.05B | 4.13B | 3.98B | 3.54B | 2.92B |
| Gross Profit | 1.31B | 1.33B | 1.50B | 1.46B | 1.33B | 1.07B |
| EBITDA | 528.39M | 581.14M | 1.03B | 986.15M | 820.16M | 768.47M |
| Net Income | -69.22M | 10.30M | 474.62M | 486.23M | 390.98M | 364.30M |
Balance Sheet | ||||||
| Total Assets | 7.56B | 7.53B | 8.20B | 7.60B | 7.02B | 5.49B |
| Cash, Cash Equivalents and Short-Term Investments | 182.82M | 194.61M | 276.77M | 233.91M | 241.21M | 228.42M |
| Total Debt | 2.79B | 2.72B | 3.07B | 3.10B | 2.92B | 2.14B |
| Total Liabilities | 4.16B | 4.02B | 4.54B | 4.58B | 4.43B | 3.35B |
| Stockholders Equity | 3.35B | 3.46B | 3.60B | 2.98B | 2.53B | 2.11B |
Cash Flow | ||||||
| Free Cash Flow | 578.50M | 501.61M | 365.37M | 294.91M | 532.03M | 380.01M |
| Operating Cash Flow | 787.45M | 734.58M | 683.90M | 619.64M | 760.80M | 546.58M |
| Investing Cash Flow | -180.25M | -245.09M | -563.15M | -607.92M | -1.44B | -601.54M |
| Financing Cash Flow | -615.66M | -550.93M | -85.52M | -42.40M | 672.60M | 47.25M |
Charles River Labs Technical Analysis
Positive
177.33
Price Trends
159.75
Positive
154.33
Positive
155.29
Positive
Market Momentum
2.36
Negative
69.21
Neutral
93.30
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRL, the sentiment is Positive. The current price of 177.33 is above the 20-day moving average (MA) of 156.43, above the 50-day MA of 159.75, and above the 200-day MA of 155.29, indicating a bullish trend. The MACD of 2.36 indicates Negative momentum. The RSI at 69.21 is Neutral, neither overbought nor oversold. The STOCH value of 93.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CRL.
Charles River Labs Risk Analysis
Charles River Labs disclosed 39 risk factors in its most recent earnings report. Charles River Labs reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Charles River Labs Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $15.06B | 39.60 | 89.38% | ― | 9.94% | 25.30% | |
77 Outperform | $50.71B | 52.54 | 64.87% | ― | 6.68% | 18.84% | |
70 Outperform | $10.01B | 27.06 | 10.81% | 2.68% | 5.15% | 412.41% | |
66 Neutral | $10.62B | 38.81 | 3.61% | 0.30% | 3.33% | 32.86% | |
56 Neutral | $8.63B | 449.94 | -1.96% | ― | -1.21% | -115.44% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
51 Neutral | $1.32B | ― | -41.88% | ― | -3.20% | -11471.95% |
* Healthcare Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.