Education
About Us
Working with TipRanks
Follow Us
Charles River Laboratories Intl (CRL)
NYSE:CRL
Top Page
Charles River Labs
(NYSE:CRL)61Neutral
Positive Factors
Cost Savings
CRL expects pricing pressure to be slightly offset by its multi-year cost savings program, expecting to realize $175 million in savings in 2025, and $225 million in annualized savings in 2026.
Earnings Performance
Revenue and earnings per share exceeded expectations due to strong performance in the Discovery and Safety Assessment segment.
Share Repurchase
The company expects to allocate free cash flow to $350 million of share repurchase.
Negative Factors
Business Challenges
CDMO's Form 483 issue is a lingering question, which could present business challenges.
Revenue Forecast
2025 revenue is anticipated to decline 4.5-7.0% compared to consensus estimates which assume a decline of 3.6%.
Charles River Labs (CRL) vs. S&P 500 (SPY)
Market Cap
$9.00B
Dividend YieldN/A
Average Volume (3M)1.28M
Price to Earnings (P/E)685.8
Beta (1Y)1.24
Revenue Growth-1.92%
EPS Growth-96.95%
CountryUS
Employees20,100
SectorHealthcare
Sector Strength74
IndustryMedical Diagnostics & Screening
Share Statistics
EPS (TTM)0.26
Shares Outstanding51,141,605
10 Day Avg. Volume1,683,586
30 Day Avg. Volume1,278,374
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.22
Price to Cash Flow (P/CF)14.10
P/FCF Ratio27.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$177.62Price Target Upside0.97% Upside
Rating ConsensusHold
Number of Analyst Covering14
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.75
Positive
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
Positive
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.80
Positive
| 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
Positive
175.92
Price Trends
170.25
Positive
182.06
Negative
194.90
Negative
Market Momentum
0.45
Negative
62.35
Neutral
72.32
Neutral
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 175.92 is above the 20-day moving average (MA) of 162.94, above the 50-day MA of 170.25, and below the 200-day MA of 194.90, indicating a neutral trend. The MACD of 0.45 indicates Negative momentum. The RSI at 62.35 is Neutral, neither overbought nor oversold. The STOCH value of 72.32 is Neutral, 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 36 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 (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $23.35B | 36.68 | 42.82% | ― | 0.07% | -1.20% | |
73 Outperform | $21.18B | 28.63 | 9.37% | 1.14% | 0.83% | 89.55% | |
70 Outperform | $200.59B | 32.15 | 13.15% | 0.29% | 0.05% | 6.87% | |
70 Outperform | $33.79B | 25.56 | 22.55% | ― | 2.95% | 2.46% | |
68 Neutral | $27.01B | 31.87 | -680.23% | ― | 2.22% | 12.78% | |
61 Neutral | $9.00B | 685.85 | 0.45% | ― | -1.92% | -96.95% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
CRL
Charles River Labs
175.92
-87.17
-33.13%
LH
Labcorp Holdings
253.03
37.24
17.26%
MTD
Mettler-Toledo
1,291.56
-6.41
-0.49%
TMO
Thermo Fisher
531.71
-66.09
-11.06%
WAT
Waters
392.99
39.13
11.06%
IQV
IQVIA Holdings
191.63
-66.95
-25.89%
Charles River Labs Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: 13.95% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with some positive aspects such as better-than-expected fourth-quarter performance, operating margin improvements, and a return to growth in biotech revenue. However, these were overshadowed by significant challenges, including projected revenue declines, particularly in the DSA segment, and difficulties in the CDMO business, leading to a cautious outlook for 2025.Highlights
Fourth Quarter Performance Exceeds Expectations
The fourth quarter of 2024 ended with a performance that was slightly better than expected, resulting in annual revenue and non-GAAP earnings per share higher than the guidance issued in November.
Operating Margin Improvement
The operating margin increased by 80 basis points year over year to 19.9% in the fourth quarter, driven by lower unallocated corporate costs and margin expansion in the manufacturing segment.
Biotech Client Revenue Growth
In the fourth quarter, revenue from biotech clients returned to growth for the first time since the third quarter of 2023.
Cost-Saving Initiatives
Restructuring initiatives are expected to yield annualized savings of approximately $225 million by 2026, with over $175 million realized in 2025.
Lowlights
Revenue Decline
Reported revenue declined by 1.8% on an organic basis in the fourth quarter of 2024 and by 2.8% for the full year, driven primarily by lower DSA revenue.
2025 Revenue and Earnings Guidance
Projected a revenue decline of 3.5% to 5.5% on an organic basis for 2025, with non-GAAP earnings per share expected to decline to a range of $9.10 to $9.60.
DSA Segment Weakness
DSA revenue decreased by 6.2% on an organic basis for the full year, with expectations for a mid to high single-digit decline in 2025 due to lower pricing and steady volume.
Challenges in the CDMO Business
Lower commercial revenue in the CDMO business, resulting in a projected reduction of consolidated revenue by approximately 1% in 2025, along with a goodwill impairment.
Company Guidance
During the Charles River Laboratories earnings call for the fourth quarter of 2024, the company provided guidance for 2025, highlighting several key metrics and expectations. The overall revenue decline is anticipated to be between 4.5% and 7% on a reported basis, factoring in a foreign exchange headwind of over 1%, with an organic decline of 3.5% to 5.5%. This is attributed to a stabilizing DSA demand environment and lower commercial revenue in the CDMO business, reducing consolidated revenue by approximately 1%, alongside site consolidation actions contributing an additional 50 basis points reduction. The company expects non-GAAP earnings per share to range from $9.10 to $9.60. Cost-saving initiatives are projected to yield annualized savings of approximately $225 million by 2026, with $175 million realized in 2025. Operating margins are anticipated to be modestly lower than the 19.9% reported for 2024, primarily due to the inability to fully offset the decline in DSA segment revenue. Additionally, free cash flow for 2025 is expected to decrease to about $350 million from $501.6 million in 2024, driven by lower earnings and higher working capital needs.Charles River Labs Corporate Events
Business Operations and StrategyFinancial Disclosures
Charles River Labs Discusses 2025 Financial Outlook
Negative
Jan 14, 2025
Charles River Laboratories announced that it will present at the 43rd Annual J.P. Morgan Healthcare Conference on January 14, 2025, discussing its strategic focus and preliminary financial outlook for 2025. The company expects a decline in 2025 revenue, influenced by factors such as constrained spending from global biopharma clients and lower commercial CDMO revenue. Recent trends in the Discovery and Safety Assessment segment indicate stable demand, but the CDMO business faces challenges, including the termination of a major client agreement, prompting Charles River to assess asset recoverability for potential impairment. The company remains optimistic about long-term growth opportunities in its CDMO business despite current headwinds.
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.