Charles River Laboratories
CRL
$278.06
-1.28%
Charles River Laboratories International, Inc. is a leading contract research organization (CRO) that provides drug discovery and development services, including research animal models, preclinical safety assessment, and manufacturing support through in vitro testing and biologics services. The company is a dominant player in the preclinical CRO space, with a particularly strong franchise in animal models and a growing presence in non-animal testing alternatives. The current investor narrative centers on the company's recovery from a multi-year biopharma funding downturn, with recent quarterly results showing a return to modest revenue growth and improving profitability, though a large Q4 2025 impairment charge weighed on reported earnings. Management's strategic focus on higher-margin discovery and safety assessment services, along with cost discipline, has driven a sharp stock price rebound, but concerns about biopharma R&D spending and competitive pressures remain key debates.…
CRL
Charles River Laboratories
$278.06
Investment Opinion: Should I buy CRL Today?
The synthesized recommendation is Hold. While the analyst consensus is Buy with a mean rating of 1.75 and an average target price of $282.43, the implied upside of just 1.6% suggests the stock is fairly valued near-term. The core thesis is that CRL is a quality CRO emerging from a cyclical trough, but the current price already reflects much of the recovery, and revenue growth remains tepid at 1.18% year-over-year.
Supporting evidence includes the forward PE of 21.92, which is below the historical average of 30-40x, and the PS ratio of 2.51, which is significantly below the five-year range of 7.14-25.79. The company generates strong trailing FCF of $391.29 million and has stable operating margins around 12%. Analyst estimates project EPS of $16.46 and revenue of $4.70 billion next year, implying a return to growth. However, the EV/EBITDA of 31.51 is elevated, and the negative net margin of -3.59% reflects recent impairments.
The biggest risks are a slower-than-expected biopharma recovery, competitive pressures, and the high beta of 1.405 amplifying market downturns. The rating would upgrade to Buy if revenue growth accelerates above 5% and forward PE remains below 25x, or downgrade to Sell if revenue declines and operating margins fall below 10%. Relative to its own history, the stock appears undervalued on PS and forward PE, but fairly valued on EV/EBITDA and analyst targets. Overall, CRL is a fairly valued turnaround story with limited near-term upside but significant long-term potential if growth reaccelerates.
Sign up to view all
CRL 12-Month Price Forecast
CRL presents a balanced risk/reward profile with a neutral stance. The company is recovering from a cyclical trough, but revenue growth remains anemic and the stock trades close to analyst targets. The forward valuation is attractive relative to history, but the elevated EV/EBITDA and negative net margin reflect ongoing challenges. I would upgrade to bullish if revenue growth accelerates above 5% and operating margins expand, or downgrade to bearish if revenue declines and free cash flow turns negative on a trailing basis. The high beta warrants caution in volatile markets.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Charles River Laboratories's 12-month outlook, with a consensus price target around $282.43 and implied upside of +1.6% versus the current price.
Average Target
$282.43
0 analysts
Implied Upside
+1.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$145 - $320
Analyst target range
The stock is covered by 14 analysts, with a consensus recommendation of "Buy" (mean rating of 1.75 on a scale where 1 is Strong Buy and 5 is Strong Sell). The average target price is $282.43, which implies a modest upside of 1.6% from the current price of $278.06. The consensus is bullish, but the small upside suggests that the stock is already trading close to the average target, indicating that much of the optimism is priced in. The estimated EPS average for the next fiscal year is $16.46, and estimated revenue average is $4.70 billion, which would represent a significant improvement from current levels.
The target price range is wide, from a low of $145 to a high of $320, a spread of $175, which signals high uncertainty among analysts. The high target of $320 implies a 15.1% upside and likely assumes successful execution of the turnaround, margin expansion, and a recovery in biopharma R&D spending. The low target of $145, a 47.8% downside, likely prices in a prolonged downturn, competitive pressures, or further impairments. Recent institutional ratings show a mix of upgrades and neutral stances: Morgan Stanley upgraded to Overweight in June 2026, CLSA upgraded to Outperform in May 2026, while Mizuho and UBS maintain Neutral ratings. This pattern suggests growing but not unanimous confidence in the recovery story. The wide target spread and mixed ratings indicate that the stock's future performance is highly dependent on the company's ability to deliver on its growth initiatives.
Drowning in data?
Find the real signal!
Bulls vs Bears: CRL Investment Factors
The bull case rests on CRL's powerful momentum, discounted forward valuation, and stable core profitability, while the bear case highlights anemic revenue growth, elevated EV/EBITDA, and minimal analyst upside. The evidence is balanced but slightly favors the bulls given the strong relative strength and analyst consensus. The most critical tension is whether revenue growth can accelerate meaningfully from the current 1.18% pace; if it does, the stock could break out to new highs, but if it stalls, the high beta and premium EV/EBITDA could trigger a sharp correction.
Bullish
- Powerful momentum and relative strength: CRL has surged 77.12% over the past year and 81.03% over six months, massively outperforming the S&P 500's 15.01% and 17.44% respective gains. The 1-year relative strength of +62.11% signals persistent market leadership and strong institutional accumulation.
- Forward PE below historical average: The forward PE of 21.92 is well below the stock's historical average of 30-40x during profitable periods, suggesting the market is not pricing in a full recovery. If earnings meet the $16.46 consensus EPS estimate, the multiple could expand toward historical norms.
- Analyst consensus remains bullish: 14 analysts rate the stock a Buy with a mean rating of 1.75, and the average target price of $282.43 implies a modest 1.6% upside. Recent upgrades from Morgan Stanley (Overweight) and CLSA (Outperform) reflect growing confidence in the turnaround.
- Core profitability intact despite impairments: Operating income has been stable at approximately $120 million per quarter, with Q1 2026 operating margin of 12.04% matching Q4 2025's 12.09%. The net loss was driven by a $405 million acquisition and non-cash charges, not operational deterioration.
Bearish
- Revenue growth is anemic: Q1 2026 revenue grew just 1.18% year-over-year to $995.83 million, following a Q4 2025 decline. This tepid growth suggests the biopharma funding recovery is slower than hoped, and the company remains far from its prior growth trajectory.
- Valuation stretched on EV/EBITDA: The EV/EBITDA of 31.51 is elevated, reflecting the company's significant debt load and depressed EBITDA due to impairments. This multiple leaves little room for error if earnings recovery stalls.
- Negative net margin and ROE: Trailing net margin is -3.59% and ROE is -4.56%, primarily due to large non-cash impairments. While these are expected to reverse, the negative profitability metrics weigh on sentiment and could delay multiple expansion.
- High beta amplifies downside: With a beta of 1.405, CRL is 40.5% more volatile than the market. The max drawdown of -33.88% over the past year illustrates the potential for sharp reversals, especially after a steep rally.
CRL Technical Analysis
CRL is in a powerful, sustained uptrend, with a 1-year price change of +77.12% and a 6-month gain of +81.03%, far outpacing the S&P 500's +15.01% and +17.44% over the same periods. The stock closed at $278.06 on 2026-09-18, which is 91.7% of its 52-week range (low of $144.26, high of $303.31), indicating it is trading near the upper end of its annual range. This positioning suggests strong momentum but also raises the risk of overextension, especially after such a steep ascent. The current price is 8.3% below the 52-week high, leaving room for a breakout but also vulnerable to profit-taking.
Short-term momentum has decelerated, with a 1-month decline of -4.12% and a 3-month gain of +50.30%, showing a sharp contrast between the explosive intermediate-term rally and recent weakness. The 1-month relative strength versus SPY is -3.16%, meaning CRL underperformed the market by over 3 percentage points in the past month, a divergence that could signal a temporary pullback or the start of a consolidation phase. The stock's beta of 1.405 indicates it is 40.5% more volatile than the broader market, which amplifies both upside and downside moves. Volume of 1.48 million shares on the latest day is moderate, but without average volume data, it is difficult to gauge conviction behind the recent pullback.
Key technical support lies near the 52-week low of $144.26, but a more immediate support zone could be around the $250-$260 area, which corresponds to the late-August consolidation. Resistance is at the 52-week high of $303.31; a breakout above this level would confirm the uptrend and likely attract momentum buyers, while a breakdown below $250 could signal a deeper correction. The max drawdown of -33.88% over the past year highlights the stock's vulnerability to sharp reversals, despite the overall uptrend. Given the high beta, position sizing should account for the potential for amplified swings, and traders may look for a stabilization near current levels before committing to new longs.
Beta
1.41
1.41x market volatility
Max Drawdown
-33.9%
Largest decline past year
52-Week Range
$144-$303
Price range past year
Annual Return
+77.1%
Cumulative gain past year
| Period | CRL Return | S&P 500 |
|---|---|---|
| 1m | -4.1% | -0.5% |
| 3m | +50.3% | +2.3% |
| 6m | +81.0% | +16.6% |
| 1y | +77.1% | +14.8% |
| ytd | +37.4% | +11.7% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
CRL Fundamental Analysis
Revenue has been roughly flat to slightly growing, with the most recent quarter (Q1 2026) showing revenue of $995.83 million, up 1.18% year-over-year from $984.17 million in Q1 2025. This follows a Q4 2025 revenue of $994.23 million and Q3 2025 revenue of $1,004.85 million, indicating a stabilization after prior declines. The sequential trend shows revenue hovering around the $1 billion mark, with no clear acceleration yet. The Discovery and Safety Assessment segment, at $596.9 million, is the largest contributor, followed by Research Models and Services at $208.4 million and Manufacturing Support at $190.5 million. The modest growth suggests the company is emerging from a trough, but a return to robust growth will depend on biopharma R&D spending recovery.
Profitability has been volatile due to large non-cash impairments. In Q1 2026, the company reported a net loss of $14.84 million, or -$0.30 per diluted share, compared to net income of $25.47 million in Q1 2025. However, the Q4 2025 net loss of $276.56 million included a significant impairment charge, and excluding such items, operating income has been stable at around $120 million per quarter. Gross margin in Q1 2026 was 28.05%, down from 32.28% in Q1 2025, but the trailing twelve-month gross margin is 30.52%. The operating margin for Q1 2026 was 12.04%, consistent with the prior year's 12.09% in Q4 2025, indicating core profitability is intact despite the net loss. The company's net margin is negative at -3.59% on a trailing basis, but this is largely due to the impairment, and the forward P/E suggests analysts expect a return to profitability.
The balance sheet shows a debt-to-equity ratio of 0.97, which is moderate but higher than the industry average, and a current ratio of 1.29, indicating adequate liquidity. Free cash flow for the trailing twelve months is $391.29 million, but in Q1 2026, free cash flow was negative $14.83 million due to a $405 million acquisition and $55.9 million in capital expenditures. The company has been actively repurchasing shares, with $208.3 million repurchased in Q1 2026, funded partly by debt. Return on equity is -4.56%, reflecting the recent losses, but return on assets is positive at 4.11%. The cash flow coverage ratio is low at 0.013, suggesting that operating cash flow is not sufficient to cover debt obligations in the short term, though the company has a history of strong cash generation. Overall, the balance sheet is manageable, but the negative free cash flow in the latest quarter warrants monitoring.
Quarterly Revenue
$995830000.0B
2026-03
Revenue YoY Growth
+1.2%
YoY Comparison
Gross Margin
28.1%
Latest Quarter
Free Cash Flow
$391290000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is CRL Overvalued?
Since the company reported a net loss on a trailing basis, the PE ratio is negative (-69.99), making it not meaningful. Therefore, the most appropriate valuation metric is the forward PE ratio, which is 21.92, based on estimated EPS of $16.46 for the next fiscal year. The price-to-sales (PS) ratio is 2.51, and the EV/EBITDA is 31.51, which is elevated. The gap between the negative trailing PE and the positive forward PE reflects the market's expectation of a strong earnings recovery, driven by margin expansion and revenue growth. The PEG ratio of 0.045 is extremely low, but this is distorted by the negative trailing earnings; using forward estimates, the PEG would be more meaningful.
Compared to the industry average, CRL's forward PE of 21.92 is slightly below the S&P 500's average but in line with the healthcare sector. The PS ratio of 2.51 is lower than the industry average for diagnostics and research, which often trades at 3-4x sales, suggesting a discount. However, the EV/EBITDA of 31.51 is high, reflecting the company's significant debt load and low EBITDA due to impairments. The price-to-book ratio of 3.19 is also above the industry median, indicating a premium on book value. Overall, the valuation appears reasonable on a forward earnings basis, but the high EV/EBITDA and negative net margin suggest that the market is pricing in a substantial turnaround.
Historically, CRL's PS ratio has ranged from a low of 7.14 to a high of 25.79 over the past five years, and the current PS of 2.51 is significantly below that range, which could indicate a value opportunity or a reflection of the company's recent struggles. The forward PE of 21.92 is also below the historical average PE of around 30-40x during periods of profitability. This suggests that the stock is not expensive relative to its own history, but the market may be discounting future growth. If the company can deliver on earnings expectations, the multiple could expand, but any disappointment could lead to further compression.
PE
-70.0x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 15x~52x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
31.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are moderate but noteworthy. The debt-to-equity ratio of 0.97 is above the industry average, and the current ratio of 1.29 indicates adequate but not abundant liquidity. Free cash flow turned negative in Q1 2026 at -$14.83 million due to a $405 million acquisition and $55.9 million in capital expenditures, though the trailing twelve-month FCF remains positive at $391.29 million. The cash flow coverage ratio of 0.013 is low, suggesting operating cash flow may not comfortably cover debt obligations in the short term. Additionally, revenue concentration in the Discovery and Safety Assessment segment ($596.9 million, or 60% of Q1 2026 revenue) exposes the company to segment-specific downturns.
Market and competitive risks are significant given the stock's high beta of 1.405 and premium EV/EBITDA of 31.51. The valuation leaves little room for disappointment; any slowdown in biopharma R&D spending could compress multiples rapidly. Competitive pressures from other CROs and alternative testing methods could erode CRL's market share, particularly in animal models. Regulatory headwinds, such as potential restrictions on animal testing, pose a long-term threat. The recent 1-month underperformance of -3.16% relative to SPY may signal a loss of momentum, and the wide analyst target range ($145-$320) underscores the uncertainty. Macro sensitivity is heightened by the high beta, meaning a market downturn could disproportionately impact CRL.
The worst-case scenario involves a prolonged biopharma funding drought, revenue growth turning negative, and further impairments. In this scenario, the stock could retest its 52-week low of $144.26, representing a 48.1% decline from the current price of $278.06. The analyst low target of $145 aligns with this downside. A more moderate bear case might see the stock fall to the $200-$220 range, a 21-28% decline, if growth stalls but profitability holds. Investors should be prepared for a potential drawdown of up to 48% in a severe downturn, given the stock's historical max drawdown of -33.88% and high beta.
FAQ
The key risks include: 1) Financial risk: debt-to-equity of 0.97 and negative free cash flow in Q1 2026 of -$14.83 million due to acquisitions; 2) Competitive risk: potential loss of market share in animal models to alternative testing methods; 3) Macro risk: high beta of 1.405 means the stock is 40.5% more volatile than the market, and a downturn could disproportionately impact it; 4) Company-specific risk: revenue concentration in the Discovery and Safety Assessment segment (60% of revenue) and reliance on biopharma R&D spending. The most severe risk is a prolonged funding drought leading to a retest of the 52-week low of $144.26.
Our 12-month forecast has three scenarios: Bull case (25% probability) targets $320-$340, assuming a robust biopharma recovery and revenue growth above 5%. Base case (55% probability) targets $270-$300, assuming gradual recovery and meeting consensus estimates. Bear case (20% probability) targets $145-$200, assuming a prolonged downturn and revenue declines. The most likely scenario is the base case, with the stock trading around the analyst average target of $282.43. The key assumption is that revenue growth accelerates modestly and margins remain stable.
CRL appears fairly valued to slightly undervalued on some metrics. The forward PE of 21.92 is below the historical average of 30-40x, and the PS ratio of 2.51 is well below the five-year range of 7.14-25.79. However, the EV/EBITDA of 31.51 is elevated, reflecting the debt load and depressed EBITDA. The market is pricing in a successful turnaround, with estimated EPS of $16.46 next year. If the company delivers, the multiple could expand; if not, the stock could compress. Overall, the valuation is reasonable but not a screaming bargain.
CRL is a good buy for investors with a long-term horizon who believe in a biopharma R&D recovery, but it is not without risks. The stock trades at a forward PE of 21.92, below its historical average, and has strong trailing free cash flow of $391.29 million. However, revenue growth is only 1.18% year-over-year, and the average analyst target of $282.43 offers just 1.6% upside. The biggest downside risk is a retest of the 52-week low of $144.26, a 48% decline. Therefore, it is suitable for investors who can tolerate volatility and have a 2-3 year horizon, but near-term upside may be limited.
CRL is more suitable for long-term investment (2-3 years) given its turnaround nature and the need for a biopharma R&D recovery to materialize. The stock does not pay a dividend (payout ratio 0%), so returns depend on capital appreciation. Its high beta of 1.405 and max drawdown of -33.88% make it unsuitable for short-term trading unless one actively manages risk. Earnings visibility is moderate, with analyst estimates for EPS of $16.46 next year. A minimum holding period of 18-24 months is suggested to ride out volatility and benefit from the recovery.
