CRL - Charles River Could be an Apt Pick Right Now: Here's Why | Benzinga
Charles River Laboratories International, Inc. (NYSE: CRL)'s Research Model and Services ("RMS") business is seeing extensive growth across multiple regions and is primed to be a key growth driver this year. The DSA (Discovery and Safety Assessment) arm's modest revenue growth forecast for the full year is optimistic as demand stabilizes. Also, the company's strategic alliances are helping it expand its offerings.
Meanwhile, headwinds from adverse currency impacts and market challenges pose a concern for Charles River's operations.
In the past year, this Zacks Rank #3 (Hold) company's shares have plunged 2.9% against the 5.7% growth of the industry. The S&P 500 composite has risen 26.6% during the same time frame.
Operating as a full-service, early-stage contract research organization, Charles River has a market capitalization of $10.38 billion. CRL's earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.92%.
Let's delve deeper.
Upsides
RMS Business Continues to Grow: The RMS business services are in high demand among Charles River's clients in the field of basic research and screening of non-clinical drug candidates. The segment continuously benefits from higher NHP (nonhuman primate) revenues as well as broad-based growth in all geographic regions for small research models.
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Over the past several quarters, the company has witnessed strong growth within the Insourcing Solutions (IS) business led by the CRADL (Charles River Accelerator and Development Labs) initiative. To support client demand, Charles River consistently expands CRADL's footprint both organically and through the acquisition of Explora BioLabs (done in 2022), a provider of contract vivarium research services. In the first quarter of 2024, the company signed new contracts for its legacy IS Vivarium management solutions and noted that the CRADL growth rate is expected to accelerate in 2024.
Revenues for small models increased ...