CRA International, Inc. (NASDAQ:CRAI), which is in the professional services business, and is based in United States, received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to $53.05 at one point, and dropping to the lows of $38.82. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether CRA International’s current trading price of $38.82 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at CRA International’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
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What’s the opportunity in CRA International?
Good news, investors! CRA International is still a bargain right now. According to my valuation, the intrinsic value for the stock is $72.99, but it is currently trading at US$38.82 on the share market, meaning that there is still an opportunity to buy now. CRA International’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
Can we expect growth from CRA International?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 7.7% expected over the next year, growth doesn’t seem like a key driver for a buy decision for CRA International, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since CRAI is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on CRAI for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CRAI. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on CRA International. You can find everything you need to know about CRA International in the latest infographic research report. If you are no longer interested in CRA International, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.