CRA International (CRAI) is a global consulting firm that offers economic, financial and business management expertise to major law firms, businesses, accounting firms, and governments, explains Doug Gerlach, editor of SmallCap Informer.
The Boston-based company's consultants combine analysis with practical experience and in-depth understanding of industries and markets.
The company believes that its analytical strength enables it to reach objective, factual conclusions to help clients make important business and policy decisions and resolve critical disputes. The CRA International team consists of more than 800 consultants from 50 countries around the world.
CRA International is often retained in high stakes business matters, such as multi-billion dollar mergers and acquisitions, new product introductions, major strategy and capital investment decisions, or complex litigation cases, the outcomes of which often have significant implications or consequences for the parties involved.
For example, in the latest quarter, a team of CRA experts supported AerCap's acquisition of GE Capital Aviation Services in a $30 billion transaction bringing together aircraft, engine, and helicopter portfolios to create a major aviation leasing company.
The team addressed legal, regulatory, and financial aspects of the deal in multiple country jurisdictions. Many of the firm's clients are not publicly disclosed, but this example illustrates the type of work for which the firm is regularly engaged.
Since the pandemic began, CRA International has grown top line revenue more than 10% in five of six quarters. M&A activity is at record levels, and this area is one of the company’s largest practices and one that is expected to continue to drive business through 2021.
For full-year fiscal 2021, management guides to revenue in the range of $565 million to $575 million compared to $508.4 million in fiscal 2020. Analysts who follow the company project long-term EPS growth of 15.0%. We target long-term revenue growth of 12.0% a year, with margin expansion helping to boost EPS to 15.0% annually.
The stock’s current P/E ratio is 21.7, higher than the stock’s adjusted P/E but below our high P/E target of 22.2. If EPS reach $8.85, a high price of $196 could be reached. On the downside, a 20% drop from the current price of $95.43 equals $76. This indicates the upside/downside ratio is 5.3:1 and the projected total return could be 16.9%
