NEW YORK ( TheStreet) -- CRA International (Nasdaq: CRAI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall. Highlights from the ratings report include:
- Powered by its strong earnings growth of 385.71% and other important driving factors, this stock has surged by 50.25% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although CRAI had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Professional Services industry. The net income increased by 382.8% when compared to the same quarter one year prior, rising from -$1.52 million to $4.31 million.
- CRA INTERNATIONAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CRA INTERNATIONAL INC reported lower earnings of $0.24 versus $0.58 in the prior year. This year, the market expects an improvement in earnings ($1.66 versus $0.24).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Professional Services industry and the overall market, CRA INTERNATIONAL INC's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for CRA INTERNATIONAL INC is currently lower than what is desirable, coming in at 31.80%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 5.30% is above that of the industry average.