Analyzing Charles River Laboratories International (CRL) from an Investor's Perspective

Now trading at a price of $224.88, Charles River Laboratories International has moved -3.3% so far today.

Charles River Laboratories International returned gains of 16.7% last year, with its stock price reaching a high of $275.0 and a low of $161.65. Over the same period, the stock underperformed the S&P 500 index by -9.7%. The company's 50-day average price was $248.03. Charles River Laboratories International, Inc. provides drug discovery, non-clinical development, and safety testing services in the United States, Europe, Canada, the Asia Pacific, and internationally. Based in Wilmington, MA, the Large-Cap Health Care company has 20,400 full time employees. Charles River Laboratories International has not offered a dividend during the last year.

Strong Revenue Growth but Significant Leverage Levels:

2018 2019 2020 2021 2022 2023
Revenue (M) $2,266 $2,621 $2,924 $3,540 $3,976 $4,129
Operating Margins 15% 13% 15% 17% 16% 15%
Net Margins 10% 10% 12% 11% 12% 11%
Net Income (M) $226 $252 $364 $391 $493 $475
Net Interest Expense (M) $64 $61 $86 $74 -$59 $137
Depreciation & Amort. (M) $162 $198 $235 $266 $304 $314
Diluted Shares (M) 49 50 51 51 51 51
Earnings Per Share $4.62 $5.07 $7.2 $7.6 $9.6 $9.22
EPS Growth n/a 9.74% 42.01% 5.56% 26.32% -3.96%
Avg. Price $116.17 $134.93 $189.24 $354.91 $274.39 $222.06
P/E Ratio 24.61 26.1 25.75 45.68 28.11 23.95
Free Cash Flow (M) $117 $40 $380 $532 $295 $365
CAPEX (M) $140 $141 $167 $229 $325 $319
EV / EBITDA 14.11 14.85 16.5 23.49 17.61 14.7
Total Debt (M) $1,642 $1,888 $1,980 $2,666 $2,708 $2,647
Net Debt / EBITDA 2.93 3.0 2.62 2.84 2.67 2.55
Current Ratio 1.61 1.44 1.43 1.23 1.32 1.52

Charles River Laboratories International benefits from rapidly growing revenues and increasing reinvestment in the business, generally positive cash flows, and decent operating margins with a stable trend. The company's financial statements show a strong EPS growth trend and a decent current ratio of 1.52. Furthermore, Charles River Laboratories International has significant leverage levels.

a Lower P/B Ratio Than Its Sector Average but Its Shares Are Expensive:

Charles River Laboratories International has a trailing twelve month P/E ratio of 29.1, compared to an average of 30.21 for the Health Care sector. Based on its EPS guidance of $12.4, the company has a forward P/E ratio of 20.0. Charles River Laboratories International's PEG ratio is 2.48 on the basis of the 11.8% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued. In contrast, the market is likely undervaluing Charles River Laboratories International in terms of its equity because its P/B ratio is 3.18 while the sector average is 4.08. The company's shares are currently trading 86.7% below their Graham number.

Charles River Laboratories International Has an Average Rating of Buy:

The 11 analysts following Charles River Laboratories International have set target prices ranging from $226.0 to $300.0 per share, for an average of $262.8 with a buy rating. The company is trading -14.4% away from its average target price, indicating that there is an analyst consensus of some upside potential.

Charles River Laboratories International has an average amount of shares sold short because 4.8% of the company's shares are sold short. Institutions own 103.0% of the company's shares, and the insider ownership rate stands at 0.97%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 12% stake in the company is worth $1,359,759,698.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.