Shares of CRA International, Inc. CRAI have gained 15.7% in the past three months, against its industry’s decline of 5.1%.



Catalysts Behind the Upsurge

CRA International is well positioned to deliver profitable growth through organic expansions and strategic acquisitions. The company’s healthy financial position provides flexibility to pursue new hires and acquisitions that support the core offerings in its portfolio. The company attempts to generate a high level of repeat business from its existing relationships based on its solid reputation and quality of work. Its key areas of focus are – generating balanced and profitable growth across the organization through optimum organic and inorganic means, strengthening client relationships within two lines of business and simplifying internal processes. The company continues to invest in business developments, client-facing activities and recruiting senior-level consultants.

CRA International reported strong results for fourth-quarter 2017. Adjusted earnings per share improved more than 100% on a year-over-year basis. The increase was aided by a strong rise in revenues and favorable tax act.

Revenue grew 22% year over year to $97.0 millionin fourth-quarter 2017.Top-line growth was primarily driven by broad-based revenue growth in its Energy, Forensic Services, Labor & Employment, Life Sciences and Marakon practices and strong contributions by its Antitrust & Competition Economics and Finance practices. International operations showed substantial growth with North American operations reflecting nearly 15% rise and European operations growing more than 50% year over year.

The company is also restructuring its operations to improve profitability. Further, it continues to trim its expenses by eliminating excess office space capacity, better rationalizing the remaining office space and lowering its administrative spending.

We also appreciate the company’s shareholder friendly moves. The company’s board of directors recently approved an expanded share repurchase program of an additional $20 million of its common stock. The stock already holds approximately $9.5 million under its existing share repurchase program. Further, a quarterly cash dividend of 17 cents per common share, payable on Mar 16, 2018 to shareholders of record as of Feb 27, 2018, was also declared.

CRA International aims to achieve growth organically in the coming quarters through new engagements and several cross-selling opportunities. The improved cost structure and broad-based profitable growth are expected to translate into attractive margins.

Upward Estimate Revisions, Zacks Rank & Style Score

The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Over the last 60 days, the Zacks Consensus Estimate of earnings for the current quarter increased 21.9% to 50 cents per share. Estimates for 2018 increased 19.4% to $2.15 per share in the same time frame.

The upward estimate revisions along with bullish Zacks Rank #1 (Strong Buy) reflect optimism over prospects of CRA International. You can see the complete list of today’s Zacks #1 Rank stocks here.

Additionally, the stock’s VGM Score of A highlights its short-term attractiveness. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of all three scores.

Positive Earnings Surprise History

CRA International has a impressive earnings surprise history. The company’s earnings have surpassed the Zacks Consensus Estimate in three of the previous four quarters, delivering an average positive earnings surprise of 27.8%.

Other Stocks to Consider

Some other top-ranked stocks in the broader Business Services sector include FTI Consulting FCN, NV5 Global NVEE and CynergisTek CTEK. While FTI Consulting and NV5 Global sport a Zacks Rank #1, CynergisTekis a Zacks Rank #2 (Buy) stock.

In the previous four quarters, FTI Consulting, NV5 Globaland CynergisTek have delivered a positive earnings surprise of 6.1%, 5.8% and 65.8%, respectively.

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