Charles River Labs (CRL) AI Stock Analysis

• Market Cap: $8.06B
• Dividend Yield: N/A
• Average Volume (3M): 960.85K
• Price to Earnings (P/E): 449.9
• Beta (1Y): 0.71
• Revenue Growth: -1.21%
• EPS Growth: -115.44%
• Country: US
• Employees: 18,700
• Sector: Healthcare
• Sector Strength: 47
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 3.12
• Shares Outstanding: 49,214,176
• 10 Day Avg. Volume: 934,000
• 30 Day Avg. Volume: 960,848
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.25
• Enterprise Value/Revenue: 2.49
• Enterprise Value/Gross Profit: 7.68
• Enterprise Value/Ebitda: 19.02
• 1Y Price Target: $171.00
• Price Target Upside: 5.04% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 56 Neutral
• Price Target: $167.00 ▲(2.58% Upside)

The overall stock score of 56 reflects a mixed financial performance with strong revenue growth but profitability challenges. Technical indicators suggest a neutral market sentiment, while valuation metrics are unattractive due to negative earnings. The earnings call provides a cautiously optimistic outlook, but ongoing challenges in key segments remain a concern.

Positive Factors

Financial Performance

Charles River reported second-quarter results that included a strong beat on the top and bottom lines, driven by better-than-expected performance across all segments.

Regulatory Resolution

The U.S. government has cleared nonhuman primate shipments for legal entry, resolving previous legal investigations.

Strategic Opportunities

There is an opportunity to realize meaningful value creation through the potential sale of the manufacturing segment.

Negative Factors

Booking Concerns

The main driver was the company’s weaker-than-expected DSA bookings, which declined 18% sequentially due primarily to a slowdown in demand from global biopharma clients and increased cancellations from both large pharma and smaller innovators.

Regulatory Challenges

There is some concern about the shift away from animal testing, which could impact certain operations.

Segment Performance

Elevated cancelations in the DSA segment have contributed to share pressure.

Charles River Labs Business Overview & Revenue Model

Company Description

Charles River Laboratories (CRL) is a leading global provider of laboratory services and products for the pharmaceutical and biotechnology industries. The company specializes in early-stage drug development, offering a comprehensive suite of services including preclinical and clinical research, toxicology testing, and laboratory animal medicine. With a focus on accelerating the drug development process, CRL supports its clients through a range of solutions that integrate scientific expertise and innovative technologies.

How the Company Makes Money

Charles 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 Financial Statement Overview

Summary

Charles River Labs exhibits strong operational cash flows and a stable equity base. However, recent declines in revenue and profitability metrics highlight potential operational challenges. The balance sheet remains leveraged yet stable, though the negative net income impacts ROE and overall profitability outlook.

Income Statement

Charles River Labs has shown a fluctuating revenue growth with a recent decline, indicated by a -2.1% drop in revenue from 2024 to TTM 2025. Gross profit margin remains healthy at 31.8% for TTM 2025, though lower compared to previous years. The net profit margin turned negative to -0.8% in TTM 2025, revealing profitability challenges, exacerbated by declining EBIT and EBITDA margins to 4.8% and 13.6% respectively.

Balance Sheet

The company's debt-to-equity ratio stands at 0.93 for TTM 2025, indicating a moderate level of leverage. The equity ratio is stable at 42.1%, showcasing a good asset base supported by equity. However, the ROE has turned negative due to the net loss, posing concerns about shareholder returns.

Cash Flow

Operating cash flow remains robust at $776 million in TTM 2025, a positive indicator. Free cash flow has increased by 12.3% from the previous year, demonstrating effective cash management. The operating cash flow to net income ratio is high due to a negative net income, suggesting strong operational cash generation despite profitability challenges.

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	854.29M	759.15M
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

• Technical Analysis Sentiment: Positive
• Last Price: 162.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 162.8 is above the 20-day moving average (MA) of 159.27, above the 50-day MA of 158.16, and above the 200-day MA of 160.84, indicating a bullish trend. The MACD of 0.42 indicates Negative momentum. The RSI at 56.21 is Neutral, neither overbought nor oversold. The STOCH value of 89.28 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	$51.34B	53.41	64.87%	―	6.68%	18.84%
QGEN	74 Outperform	$10.58B	28.62	10.81%	2.61%	5.15%	412.41%
DGX	70 Neutral	$20.17B	21.36	13.65%	1.72%	12.58%	13.00%
NTRA	70 Neutral	$22.74B	―	-24.32%	―	44.38%	22.87%
ILMN	65 Neutral	$15.17B	12.50	68.11%	―	-3.32%	―
CRL	56 Neutral	$8.06B	449.94	-1.96%	―	-1.21%	-115.44%
Sector *	51 Neutral	$7.83B	-0.18	-40.10%	2.29%	21.46%	-2.03%

Charles River Labs Corporate Events

Charles River Labs Extends CEO’s Term Amid Shareholder Meeting

On May 20, 2025, Charles River Laboratories extended the employment term of its CEO, James C. Foster, by an additional year, maintaining existing terms. During the same day, the company held its Annual Meeting of Shareholders, electing seven directors, appointing four new board members, and approving executive compensation and auditor appointments, while rejecting a proposal from PETA regarding non-human primate reports.