Investment Thesis
CRA International exhibits concerning cash generation despite topline growth, with operating cash flow of -$113.9M while reporting positive net income, indicating significant working capital deterioration and earnings quality concerns. The sub-1.0 current ratio combined with negative free cash flow creates liquidity pressure that outweighs the 9.3% revenue growth and debt-free balance sheet.
Strengths
- Revenue growth of 9.3% YoY demonstrates market demand
- Debt-free balance sheet with 0.00x Debt/Equity ratio eliminates refinancing risk
- EPS growth of 20.8% YoY suggests effective capital allocation through buybacks
Risks
- Operating cash flow of -$113.9M vs. positive $11.1M net income signals severe working capital deterioration and earnings quality issues
- Current ratio of 0.83x below 1.0 indicates liquidity stress and potential covenant concerns
- Net income flat YoY despite 9.3% revenue growth reveals margin compression and operational deleverage
- Free cash flow of -$116.5M is unsustainable and threatens cash reserves
Key Metrics to Watch
- Operating cash flow trend and accounts receivable Days Sales Outstanding (DSO)
- Current ratio and working capital position to assess liquidity sustainability
- Net margin trajectory relative to revenue growth to confirm operational profitability
Financial Metrics
Revenue
201.0M
Net Income
11.1M
EPS (Diluted)
$8.14
Free Cash Flow
-116.5M
Total Assets
662.4M
Cash
32.5M
Profitability Ratios
Gross Margin
26.8%
Operating Margin
9.0%
Net Margin
5.5%
ROE
5.6%
ROA
1.7%
FCF Margin
-58.0%
Balance Sheet & Liquidity
Current Ratio
0.83x
Quick Ratio
0.83x
Debt/Equity
0.00x
Debt/Assets
0.0%
Interest Coverage
17.84x
Long-term Debt
N/A
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-09T10:09:31.105304 |
Data as of: 2026-04-04 |
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