3 Resilient Consulting Stocks to Weather the Storm: STN, CBZ, and CRAI Lead the Charge

The consulting sector faces headwinds: macroeconomic uncertainty, rising debt costs, and industry-specific risks like regulatory scrutiny and client budget cuts. Yet, amid the turbulence, select firms are positioning themselves to thrive by tapping into secular trends like AI-driven transformation, infrastructure spending, and cost optimization. Below are three undervalued consulting stocks—Stantec (STN), CBIZ (CBZ), and Charles River Associates (CRAI)—that stand out for their structural growth drivers, operational discipline, and compelling valuations.

Stantec (STN): Infrastructure Leader with Backlog-Driven Momentum

Why It's a Buy:
Stantec's Q1 2025 results underscore its resilience. Net revenue surged 13.3% year-over-year to $1.6 billion, driven by 5.9% organic growth and strategic acquisitions. Its $7.9 billion backlog—up 12.8%—provides 12 months of contracted work, shielding it from near-term demand volatility. The company's focus on sustainable infrastructure (e.g., wastewater upgrades, data center design) aligns with global spending trends: the World Bank estimates $44 trillion in infrastructure investment needed by 2030 to meet climate goals.

Key Strengths:
- Margin Expansion: Adjusted EBITDA rose 19.1% to $252.3 million, with margins improving to 16.2%, aided by cost discipline and higher-margin projects.
- Acquisition Synergy: The Page acquisition (1,400 employees) and Ryan Hanley deal (Irish water expertise) add $180–200 million in annual revenue, boosting its U.S. and European market share.
- Valuation: Trading at 12.3x forward EV/EBITDA—below its five-year average of 14.5x—STN offers upside as integration benefits materialize.

Risks & Considerations:
- High leverage ($1.5 billion debt) but improving metrics (net debt/EBITDA at 1.1x vs. target 1.0–2.0x).
- Potential delays in Page/Ryan Hanley integration.

CBIZ (CBZ): Financial Services Powerhouse with Integration Gains

Why It's a Buy:
CBIZ's Q1 2025 revenue miss (down $21 million vs. estimates) caused a 11% stock dip, but its operating leverage remains intact. Net income rose 59.7% to $122.8 million, while Adjusted EBITDA doubled to $237.6 million, reflecting efficiency gains from its Marcum integration (a $1.7 billion accounting firm acquired in late 2023).

Key Strengths:
- Client Diversification: 70% of revenue comes from private clients, insulating it from public-sector budget cuts.
- Tech-Driven Growth: Investments in software tools for payroll and benefits management boost margins; non-GAAP EPS guidance of $3.60–$3.65 implies 13–14% growth in 2025.
- Valuation: At 22.8x forward P/E—below the sector average of 25.32—and with a debt-reduction plan (targeting 2–2.5x leverage by 2026), CBZ offers a mix of growth and stability.

Risks & Considerations:
- Overexposure to non-recurring service lines (e.g., tax planning) could pressure margins.
- Integration-related retention risks (Marcum's employee turnover is manageable but a key watchpoint).

Charles River Associates (CRAI): Undervalued Thought Leader in High-Margin Consulting

Why It's a Buy:
CRAI's Q1 2025 results were stellar: revenue hit a record $181.9 million (+5.9% YoY), with net income up 31.5% to $18.0 million. Its diversified practices—including antitrust economics, intellectual property, and energy—benefit from rising regulatory complexity and litigation demand.

Key Strengths:
- AI Integration: CRAI's work on AI antitrust cases (e.g., EC investigations into tech labor markets) and data analytics tools (e.g., for utilities) positions it as a leader in high-value, tech-driven consulting.
- Margin Resilience: Non-GAAP EBITDA margins of 16.2% (vs. guidance of 12–13%) reflect pricing power and cost controls.
- Valuation: Trading at 1.7x P/S and 16.6x P/CF—below peers—CRAI's 2.7% dividend yield adds income appeal.

Risks & Considerations:
- Rising days sales outstanding (DSO) to 107 days signals potential billing delays.
- Over-reliance on U.S. clients (70% of revenue) amid geopolitical risks.

Investment Thesis: Structural Trends + Undervaluation = Buy Opportunity

All three stocks benefit from long-term tailwinds:
1. Infrastructure spending: STN's backlog and CRAI's energy practice play into global decarbonization.
2. AI regulation demand: CRAI and STN's tech/consulting expertise address compliance needs.
3. Cost optimization: CBIZ's automation and STN's margin discipline reflect broader corporate cost-cutting trends.

Portfolio Action:
- Buy STN for its backlog and geographic diversification, targeting a 12–18-month hold.
- Add CBZ on dips, focusing on its Marcum synergy and valuation discount.
- CRAI is a defensive pick with a dividend and underappreciated AI-driven growth.

These stocks may face short-term noise, but their structural advantages and undervalued metrics make them compelling buys for investors willing to look past the macro clouds.