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Shareholders of CRA International, Inc. (NASDAQ:CRAI) will be pleased this week, given that the stock price is up 20% to US$66.16 following its latest full-year results. The result was positive overall - although revenues of US$508m were in line with what the analysts predicted, CRA International surprised by delivering a statutory profit of US$3.07 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for CRA International
Following the latest results, CRA International's three analysts are now forecasting revenues of US$537.3m in 2021. This would be an okay 5.7% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to ascend 14% to US$3.59. In the lead-up to this report, the analysts had been modelling revenues of US$517.1m and earnings per share (EPS) of US$3.27 in 2021. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
It will come as no surprise to learn that the analysts have increased their price target for CRA International 8.9% to US$73.50on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic CRA International analyst has a price target of US$85.00 per share, while the most pessimistic values it at US$62.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CRA International's past performance and to peers in the same industry. We would highlight that CRA International's revenue growth is expected to slow, with the forecast 5.7% annualised growth rate until the end of 2021 being well below the historical 11% p.a. growth over the last five years. Compare this to the 118 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.2% per year. Factoring in the forecast slowdown in growth, it looks like CRA International is forecast to grow at about the same rate as the wider industry.