Charles River Labs (CRL) AI Stock Analysis

• Market Cap: $6.83B
• Dividend Yield: N/A
• Average Volume (3M): 1.31M
• Price to Earnings (P/E): 542.2
• Beta (1Y): 1.19
• Revenue Growth: -1.92%
• EPS Growth: -96.95%
• Country: US
• Employees: 18,700
• Sector: Healthcare
• Sector Strength: 74
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 0.26
• Shares Outstanding: 49,115,710
• 10 Day Avg. Volume: 1,226,718
• 30 Day Avg. Volume: 1,311,009
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.11
• Price to Cash Flow (P/CF): 13.40
• P/FCF Ratio: 26.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $171.54
• Price Target Upside: 71.63% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 14

Charles River Labs' overall score reflects a mix of financial strengths and challenges. The company's solid cash flow and effective cost management are positive, but declining net margins and high leverage pose risks. Technical indicators suggest bearish momentum, and the extremely high P/E ratio indicates potential overvaluation. The latest earnings call and corporate events highlight concerns about revenue declines and challenges in key segments, leading to a cautious outlook for the future.

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.

Share Repurchase

The company expects to allocate free cash flow to $350 million of share repurchase.

Negative Factors

Demand Moderation

Demand is moderating sequentially from stronger levels in previous quarters, affecting the company's growth outlook.

Industry Challenges

The industry backdrop remains challenging, especially on the large biopharmaceutical side of the business.

Pricing Pressure

Pricing pressure is not moderating and may be intensifying slightly, impacting the company's revenue and margins.

Charles River Labs Business Overview & Revenue Model

Company Description

Charles 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 Money

Charles 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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 99.95
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRL, the sentiment is Negative. The current price of 99.95 is below the 20-day moving average (MA) of 152.50, below the 50-day MA of 159.51, and below the 200-day MA of 187.93, indicating a bearish trend. The MACD of -3.98 indicates Positive momentum. The RSI at 30.00 is Positive, neither overbought nor oversold. The STOCH value of 5.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CRL.

Charles River Labs Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IDXX	77 Outperform	$32.18B	37.23	57.66%	―	6.46%	5.82%
DGX	76 Outperform	$1.91B	21.41	13.24%	1.83%	6.70%	2.56%
NTRA	67 Neutral	$20.54B	―	-19.42%	―	56.75%	59.77%
QGEN	66 Neutral	$8.95B	111.52	2.27%	―	0.66%	-75.89%
CRL	59 Neutral	$6.83B	542.18	0.45%	―	-1.92%	-96.95%
ILMN	49 Neutral	$12.09B	―	-30.11%	―	-2.93%	-4.69%
Sector *	48 Neutral	$6.36B	1.28	-45.04%	2.64%	19.24%	1.69%

Charles River Labs Corporate Events

Charles River Labs Discusses 2025 Financial Outlook

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.