Charles River Laboratories International, Inc.

CRL

Services-Commercial Physical & Biological Research

Mkt Cap

$11.02B

PE

25.12

Debt

$2.663B

Cash

$338.5M

EV

$13.35B

FCF

$413.6M

Market Cap

$11.02B

P/E Ratio

25.12

Debt

$2.663B

Cash

$338.5M

EV

$13.35B

FCF

$413.6M

Charts data: {"Earnings":[{"time":"2014-12-26","value":126698000},{"time":"2015-12-25","value":149313000},{"time":"2016-12-30","value":154765000},{"time":"2017-12-29","value":123355000},{"time":"2018-12-28","value":226373000},{"time":"2019-12-27","value":252019000},{"time":"2020-12-25","value":364304000},{"time":"2021-12-24","value":390982000},{"time":"2022-12-30","value":486226000},{"time":"2023-12-29","value":474624000}],"Sales":[{"time":"2014-12-26","value":1297662000},{"time":"2015-12-25","value":1363302000},{"time":"2016-12-30","value":1681432000},{"time":"2017-12-29","value":1857601000},{"time":"2018-12-28","value":2266096000},{"time":"2019-12-27","value":2621226000},{"time":"2020-12-25","value":2923933000},{"time":"2021-12-24","value":3540160000},{"time":"2022-12-30","value":3976060000},{"time":"2023-12-29","value":4129409000}],"Net Margins":[{"time":"2014-12-26","value":0.09763559386034268},{"time":"2015-12-25","value":0.10952305505309902},{"time":"2016-12-30","value":0.09204356762569048},{"time":"2017-12-29","value":0.06640554134068619},{"time":"2018-12-28","value":0.09989559136064845},{"time":"2019-12-27","value":0.09614546780781207},{"time":"2020-12-25","value":0.12459382619232383},{"time":"2021-12-24","value":0.11044190093103137},{"time":"2022-12-30","value":0.12228839605036142},{"time":"2023-12-29","value":0.11493751284990177}],"Assets":[{"time":"2014-12-26","value":1885192000},{"time":"2015-12-25","value":2068497000},{"time":"2016-12-30","value":2711800000},{"time":"2017-12-29","value":2929922000},{"time":"2018-12-28","value":3855879000},{"time":"2019-12-27","value":4692790000},{"time":"2020-12-25","value":5490831000},{"time":"2021-12-24","value":7024292000},{"time":"2022-12-30","value":7602770000},{"time":"2023-12-29","value":8195001000}],"Stockholders Equity":[{"time":"2014-12-26","value":675927000},{"time":"2015-12-25","value":737556000},{"time":"2016-12-30","value":839125000},{"time":"2017-12-29","value":1047407000},{"time":"2018-12-28","value":1319778000},{"time":"2019-12-27","value":1637828000},{"time":"2020-12-25","value":2118169000},{"time":"2021-12-24","value":2538982000},{"time":"2022-12-30","value":2981078000},{"time":"2023-12-29","value":3602276000}],"ROE":[{"time":"2014-12-26","value":0.18744331858321978},{"time":"2015-12-25","value":0.20244293314677123},{"time":"2016-12-30","value":0.18443616862803516},{"time":"2017-12-29","value":0.11777179262693489},{"time":"2018-12-28","value":0.17152354411120657},{"time":"2019-12-27","value":0.1538739110578156},{"time":"2020-12-25","value":0.17199005367371537},{"time":"2021-12-24","value":0.1539916391687692},{"time":"2022-12-30","value":0.16310408516650687},{"time":"2023-12-29","value":0.13175670048602606}],"ROA":[{"time":"2014-12-26","value":0.10054413555754534},{"time":"2015-12-25","value":0.10176471128553728},{"time":"2016-12-30","value":0.0875503355704698},{"time":"2017-12-29","value":0.10135252747342761},{"time":"2018-12-28","value":0.0859422715287487},{"time":"2019-12-27","value":0.07482776770322132},{"time":"2020-12-25","value":0.08142920443189747},{"time":"2021-12-24","value":0.08397458420008735},{"time":"2022-12-30","value":0.08562339778791152},{"time":"2023-12-29","value":0.0753216503573337}]}

Charles River Laboratories International, Inc., a non-clinical contract research organization, provides drug discovery, non-clinical development, and safety testing services in the United States, Europe, Canada, the Asia Pacific, and internationally. It operates through three segments: Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Solutions (Manufacturing). The RMS segment produces and sells rodent research model strains and purpose-bred rats and mice for use by researchers. This segment also provides a range of services to assist its clients in supporting the use of research models in research and screening non-clinical drug candidates, including research models, genetically engineered models and services, insourcing solutions, and research animal diagnostic services. The DSA segment offers early and in vivo discovery services for the identification and validation of novel targets, chemical compounds, and antibodies through delivery of non-clinical drug and therapeutic candidates ready for safety assessment; and safety assessment services, such as toxicology, pathology, safety pharmacology, bioanalysis, drug metabolism, and pharmacokinetics services. The Manufacturing segment provides in vitro methods for conventional and rapid quality control testing of sterile and non-sterile pharmaceuticals and consumer products. This segment also offers specialized testing of biologics that are outsourced by pharmaceutical and biotechnology companies; and avian vaccine services that provide specific-pathogen-free (SPF) fertile chicken eggs, SPF chickens, and diagnostic products used to manufacture vaccines. The company also provides contract vivarium operation services to biopharmaceutical clients. Charles River Laboratories International, Inc. was founded in 1947 and is headquartered in Wilmington, Massachusetts.

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3/31/18
10-K
12/30/17

DCF

Discounted Cash Flow Valuation of Charles River Laboratories International, Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$413.6M	$442.4M	$472.2M	$503M	$534.7M	$567.2M	$600.5M	$634.5M	$668.9M	$703.8M	$739M	$7.39B
DCF		$384.7M	$357M	$330.7M	$305.7M	$282M	$259.6M	$238.5M	$218.7M	$200.1M	$182.7M	$1.827B
Value	$4.587B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 19%

Earnings Stability 88%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	11%	9.2%	6.6%	10%	9.6%	12%	11%	12%	11%	11%
ROA	10%	8.8%	10%	8.6%	7.5%	8.1%	8.4%	8.6%	7.5%	7.1%
ROE	20%	18%	12%	17%	15%	17%	15%	16%	13%	12%

What is the average Net Margin?

The average Net Margin over the past 5 years is +11.14%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.4%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +8.12%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -0.05%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +15.77%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -0.54%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate reliability of earnings, and consideration about the future are more dependable.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	3.84	4.74	4.86	5.54	5.62	5.30	5.01	9.19	7.26	6.44
Debt Equity	1.17	1.48	1.09	1.26	1.17	0.95	1.05	0.91	0.74	0.73
MIN
Graham Stability	-	-	86%	100%	100%	100%	100%	100%	100%	86%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 6.44.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 0.54.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.86.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	14%	13%	12%	3.9%	-0.45%
Net Income	17%	16%	9.2%	-2.4%	-0.042%
Stockholders Equity	23%	22%	19%	21%	0.85%
FCF	4.9%	3.9%	-1.3%	24%	-1.1%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +12.75%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -0.45%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +15.96%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -0.04%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +22.24%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +0.85%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +3.95%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -1.07%.