Specialized Advisory Work Benefits CRAI Amid Elevated Leverage

CRAI benefits from demand for specialized advisory work across litigation, regulation and management consulting. The company’s top line gained 12.8% year over year to $210.8 million, with eight practices representing 95% of revenues posting growth during the second quarter of fiscal 2026. Legal & Regulatory revenues increased 10.1%, while Management Consulting advanced 25.5%. Average weekly project lead flow and project originations also grew at double-digit rates from the prior-year quarter, supporting visibility beyond a single period.

CRAI serves corporations, law firms and government agencies across legal, regulatory and management consulting assignments. CRAI worked with 88 of the Fortune 100 and partnered with 98 of the top 100 law firms during the prior two years at the end of fiscal 2025. Its geographic reach also lowers the dependence on one market. In the second quarter of fiscal 2026, North American revenues increased 8.7% year over year and international revenues rose 32.9%.

Charles River Associates has maintained a long record of dividends and share repurchases. Dividend payments rose from $9.6 million in fiscal 2022 to $13.8 million in fiscal 2025, while repurchases climbed to $47.1 million from $27.6 million. Through the first half of fiscal 2026, CRAI repurchased 309,000 shares for $49.3 million at an average price of $160 per share and paid out $7.4 million in cash dividends and dividend equivalents.

Meanwhile, CRAI competes with large global consulting firms and specialized boutiques for complex advisory assignments. Big rivals can deploy broader resources, compete aggressively on price and make heavy tech investments. It can make client wins more costly and require continued spending on expertise and service capabilities.

CRAI ended the second quarter of fiscal 2026 with $21.4 million in cash and $219 million in revolver borrowings, or $197.6 million in net debt. The first-half operating cash use reached $118.3 million from $74.1 million a year earlier, while DSO rose to 113 days from 100 days in the first quarter. The new five-year $400-million credit facility adds funding capacity, but leverage and collection needs remain elevated.

Zacks Rank & Stocks to Consider

Charles River Associates currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader Zacks Business Services sector are Zurn Elkay Water Solutions Corporation ZWS and Ralliant Corporation RAL. These two companies also presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Zurn Elkay Water Solutions has a long-term earnings growth expectation of 14.5%. ZWS delivered a trailing four-quarter earnings surprise of 7.6%, on average.

Ralliant has a long-term earnings growth expectation of 9.4%. RAL delivered a trailing four-quarter earnings surprise of 7.1%, on average.

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