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Charles River Laboratories Intl (CRL)
NYSE:CRL
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Charles River Labs
(NYSE:CRL)
68Neutral
Positive Factors
Business Prospects
There was a reacceleration in bookings for the first time since 2022, indicating improved business prospects.
Financial Performance
Charles River Laboratories reported a strong first-quarter performance with better-than-expected results in DSA and RMS.
Market Position
CRL holds an enviable market position as a key preclinical development partner with differentiated scale and product breadth.
Negative Factors
Financial Outlook
The price target for Charles River Laboratories has been lowered from $179 to $105, indicating a less optimistic outlook.
Regulatory Changes
The FDA's plan to phase out animal testing is expected to impact Charles River Laboratories, creating uncertainty about future operations.
Revenue Decline
The expected decline in DSA revenue and operating income signifies potential challenges in maintaining current financial performance levels.
Charles River Labs (CRL) vs. S&P 500 (SPY)
Market Cap
$5.67B
Dividend YieldN/A
Average Volume (3M)2.05M
Price to Earnings (P/E)449.9
Beta (1Y)0.80
Revenue Growth-2.16%
EPS Growth-107.31%
CountryUS
Employees18,700
SectorHealthcare
Sector Strength50
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)2.34
Shares Outstanding49,115,710
10 Day Avg. Volume1,499,301
30 Day Avg. Volume2,049,426
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.14
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit9.12
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$154.79Price Target Upside11.53% Upside
Rating ConsensusHold
Number of Analyst Covering15
Charles River Labs Business Overview & Revenue Model
Company DescriptionCharles River Laboratories International, Inc. (CRL) is a leading global provider of essential products and services to support the pharmaceutical, biotechnology, and life sciences industries. The company operates through three primary segments: Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Solutions. CRL’s core offerings include laboratory animal models, preclinical and clinical laboratory services, and a variety of support services aimed at accelerating research and drug development processes.
How the Company Makes MoneyCharles River Laboratories generates revenue through a diversified model centered around its three main business segments. The Research Models and Services (RMS) segment provides laboratory animal models and related services, which are crucial for the early stages of drug discovery and development. The Discovery and Safety Assessment (DSA) segment is a significant revenue driver, offering preclinical and clinical laboratory services that help clients assess the safety and efficacy of their drug candidates. The Manufacturing Solutions segment provides products and services that support the production and release of biotechnology products. Key revenue streams also include long-term partnerships with pharmaceutical and biotechnology companies, which rely on CRL's expertise and infrastructure for outsourcing various aspects of their research and development processes. Additionally, the company's global presence and comprehensive service offerings help it capture significant market share in the life sciences industry.
Charles River Labs Financial Statement Overview
Summary
Charles River Labs demonstrates solid growth and operational efficiency with strong cash flow generation. While profitability is a concern due to declining net margins, the overall financial health is supported by a robust equity position and effective cost management. The high leverage requires careful monitoring to ensure long-term sustainability.Income Statement
Charles River Labs has shown consistent revenue growth over the years, though there was a slight decline in 2024. The gross profit has remained stable, indicating effective cost management. However, the net profit margin has decreased significantly in the latest year, suggesting challenges in maintaining profitability.―
Balance Sheet
The company maintains a stable equity ratio and has shown a gradual increase in stockholders' equity, reflecting a solid capital structure. However, the debt-to-equity ratio is relatively high, suggesting potential leverage risks that could impact financial flexibility.70
Cash Flow
Operating cash flow has been strong and growing, which is a positive indicator of the company's ability to generate cash from its core operations. Free cash flow has also increased, supporting potential reinvestment opportunities.―
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.05B | 4.13B | 3.98B | 3.54B | 2.92B | Gross Profit |
| 1.33B | 1.50B | 1.46B | 1.33B | 1.07B | EBIT |
| 227.35M | 617.26M | 650.98M | 589.86M | 432.73M | EBITDA |
| 581.14M | 1.03B | 1.04B | 854.29M | 759.15M | Net Income Common Stockholders |
| 22.20M | 474.62M | 486.23M | 390.98M | 364.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 194.61M | 276.77M | 233.91M | 241.21M | 228.42M | Total Assets |
| 7.53B | 8.20B | 7.60B | 7.02B | 5.49B | Total Debt |
| 2.72B | 3.07B | 3.10B | 2.92B | 2.14B | Net Debt |
| 2.53B | 2.79B | 2.86B | 2.68B | 1.91B | Total Liabilities |
| 4.02B | 4.54B | 4.58B | 4.43B | 3.35B | Stockholders Equity |
| 3.46B | 3.60B | 2.98B | 2.53B | 2.11B |
| Cash Flow | Free Cash Flow | |||
| 501.61M | 365.37M | 294.91M | 532.03M | 380.01M | Operating Cash Flow |
| 734.58M | 683.90M | 619.64M | 760.80M | 546.58M | Investing Cash Flow |
| -245.09M | -563.15M | -607.92M | -1.44B | -601.54M | Financing Cash Flow |
| -550.93M | -85.52M | -42.40M | 672.60M | 47.25M |
Charles River Labs Technical Analysis
Neutral
138.79
Price Trends
140.90
Negative
156.73
Negative
178.38
Negative
Market Momentum
-1.01
Negative
59.59
Neutral
82.07
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRL, the sentiment is Neutral. The current price of 138.79 is above the 20-day moving average (MA) of 115.49, below the 50-day MA of 140.90, and below the 200-day MA of 178.38, indicating a neutral trend. The MACD of -1.01 indicates Negative momentum. The RSI at 59.59 is Neutral, neither overbought nor oversold. The STOCH value of 82.07 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CRL.
Charles River Labs Risk Analysis
Charles River Labs disclosed 37 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
Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $19.66B | 22.44 | 13.35% | 1.73% | 9.38% | 6.43% | |
75 Outperform | $9.11B | 113.51 | 2.67% | ― | 0.66% | -75.89% | |
74 Outperform | $38.10B | 43.77 | 59.33% | ― | 5.56% | 4.66% | |
73 Outperform | $21.23B | ― | -18.66% | ― | 51.50% | 53.23% | |
68 Neutral | $5.67B | 449.94 | -0.92% | ― | -2.16% | -107.31% | |
55 Neutral | $11.80B | ― | -23.82% | ― | -3.47% | 25.55% | |
52 Neutral | $5.17B | 3.59 | -42.19% | 2.82% | 15.05% | -0.04% |
* Healthcare Sector Average
Performance Comparison
CRL
Charles River Labs
138.79
-89.33
-39.16%
IDXX
Idexx Laboratories
491.70
-18.12
-3.55%
ILMN
Illumina
75.76
-31.66
-29.47%
QGEN
Qiagen
41.86
-1.74
-3.99%
DGX
Quest Diagnostics
176.96
41.29
30.43%
NTRA
Natera
151.95
46.66
44.32%
Charles River Labs Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 20.26%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a cautious yet optimistic outlook, with strong cost management and improved DSA performance offsetting revenue declines across segments. While there are concerns about NIH funding and challenges in the Manufacturing segment, the company is optimistic about strategic investments and increased guidance.Q1-2025 Updates
Positive Updates
Improved DSA Segment Performance
DSA net book-to-bill improved to 1.04x in the first quarter, the first time above 1x in over 2 years, due to improved bookings and a decline in study cancellations.
Strong Cost Savings and Margin Improvement
Operating margin increased by 60 basis points to 19.1% year-over-year, driven by cost savings from restructuring initiatives, contributing to EPS growth of 3.1%.
Increased Financial Guidance
Due to better-than-expected DSA performance, revenue guidance was raised by 100 basis points to a 2.5% to 4.5% decrease organically, and non-GAAP EPS guidance was increased by $0.20 at midpoint.
Growth in Small and Midsized Biotech Revenue
Revenue for small and midsized biotech clients grew for the second consecutive quarter, indicating resilience despite funding challenges.
Successful Strategic Investments
Continued expansion into NAMs with $200 million annual revenue from NAMs-related services, highlighting Charles River's investment in advanced in vitro toxicology, predictive immunotoxicology assays, and organ-on-a-chip platforms.
Negative Updates
Revenue Decline
First quarter revenue was $984.2 million, a 2.7% decrease compared to last year. On an organic basis, revenue declined 1.8%, driven by low single-digit organic decreases in each business segment.
Challenges in Manufacturing Segment
Manufacturing revenue declined by 2.2% on an organic basis, impacted by lower commercial revenue in the CDMO business and a slow start for the Biologics Testing business.
Potential Impact of NIH Funding Cuts
Concerns over proposed NIH budget cuts and potential impact on future funding levels, particularly affecting North American academic and government clients.
Ongoing Pressure in RMS Segment
RMS revenue decreased by 2.5% on an organic basis, driven by the timing of NHP shipments in China and lower revenue for the Cell Solutions business.
Company Guidance
During the Charles River Laboratories First Quarter 2025 Earnings Conference Call, the company provided an updated financial guidance for the year. They raised their 2025 revenue guidance by 100 basis points to a 2.5% to 4.5% organic decrease and increased their non-GAAP earnings per share guidance by $0.20 at the midpoint, setting a new range of $9.30 to $9.80. This adjustment was primarily driven by better-than-expected DSA performance, where the net book-to-bill ratio returned to above 1x for the first time in over two years, indicating improved quarterly bookings. Despite a 2.7% decrease in revenue to $984.2 million for the first quarter, the operating margin improved to 19.1%, up 60 basis points year-over-year, supported by cost-saving initiatives and favorable mix. Additionally, the company generated approximately $112.4 million in free cash flow and repurchased $350 million in shares during the quarter.Charles River Labs Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Charles River Labs Appoints New Directors After Agreement
Positive
May 7, 2025
On May 6, 2025, Charles River Laboratories entered a Cooperation Agreement with Elliott Investment Management, leading to the appointment of four new directors to its Board following the 2025 Annual Meeting. This strategic move includes a comprehensive review of the company’s business to enhance long-term shareholder value, with Elliott’s involvement signifying confidence in Charles River’s potential. The changes aim to optimize operations and drive efficiencies, with the new directors bringing significant industry expertise and fresh perspectives.
Spark’s Take on CRL Stock
According to Spark, TipRanks’ AI Analyst, CRL is a Neutral.
Charles River Labs’ overall stock score reflects solid financial performance with strong cash flow, but challenges in profitability and high leverage pose risks. The technical analysis indicates bearish momentum, with the stock trading well below key moving averages. The high P/E ratio suggests potential overvaluation. The earnings call provides a mixed outlook with positive fourth-quarter results but a cautious forecast for 2025, primarily due to revenue declines and challenges in key segments.
To see Spark’s full report on CRL stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.