CRA International (CRAI): Riding Antitrust Tailwinds to Undiscovered Value

In an era of heightened regulatory scrutiny and global economic uncertainty, few companies are positioned to capitalize on the $725 million revenue growth trajectory of
(CRAI). With antitrust litigation surging and its diversified consulting model defying macro headwinds, CRAI offers a rare blend of secular demand drivers and operational resilience. Now trading at a 23.3× forward P/E—a significant discount to its historical valuation and industry peers—this is a compelling moment to bet on its long-term potential.
Antitrust Demand: A Tailwind That Won’t Fade
The most powerful catalyst for CRAI’s growth is the explosion of antitrust activity reshaping global markets. From Microsoft’s regulatory battles to Big Tech’s dominance, companies are increasingly relying on economics experts like CRA to navigate high-stakes litigation. In Q1 2025, CRA’s Antitrust & Competition Economics practice hit a new quarterly revenue high, reflecting this structural shift.
This isn’t a fleeting trend. Regulatory bodies worldwide are doubling down on enforcement, with the U.S. DOJ’s 2024 antitrust budget up 30% year-over-year. For CRAI, which has advised on landmark cases involving $100 billion+ in disputed transactions, this is a built-in revenue engine.
Diversification: Shielding Against Sector Volatility
While some sectors falter in a slowing economy, CRAI’s geographic and practice diversification is a bulwark against risk. International revenue surged nearly 20% year-over-year, with strong momentum in Life Sciences (driven by regulatory support) and Energy (amid geopolitical shifts in oil markets). Cross-practice collaboration—a hallmark of its “one-firm” model—ensures clients tackle complex challenges with integrated expertise.
This diversification isn’t just about revenue streams; it’s about client stickiness. With a replenished sales pipeline and utilization rates hitting 76% (up from 73% in 2024), CRAI is leveraging its 40-year reputation to lock in recurring demand.
Margin Strength Amid Near-Term Cash Flow Hiccups
Critics may point to a temporary dip in free cash flow (FCF) in Q1 2025—driven by working capital swings—but the underlying story is one of margin expansion. Non-GAAP EBITDA margins hit 13.6%, up from 13.0% a year ago, as utilization gains offset modest cost pressures.
While FCF turned negative in Q1, this is a seasonal quirk common in consulting firms. CRAI’s reaffirmed full-year 2025 guidance (revenue: $715–735M; EBITDA margin: 12–13%) underscores management’s confidence. With $25.6M in cash and a $90M credit line, liquidity remains solid.
Valuation: A Discounted Growth Story
At 23.3× forward P/E, CRAI trades at a 30% discount to its 5-year average and a 20% discount to consulting peers. This undervaluation persists despite 5.9% YoY revenue growth and a 31.5% surge in net income in Q1. The market is pricing in macro risks, but investors are overlooking two critical facts:
1. Antitrust demand is recession-resistant—companies spend more on litigation during downturns to protect market share.
2. CRAI’s FCF will normalize as working capital tightens, and its 9% dividend yield provides a safety net.
Conclusion: A Buy for the Long Game
CRAI isn’t just a play on antitrust litigation—it’s a bet on a $150 billion consulting industry where specialization wins. With 20%+ growth in high-margin practices, a fortified balance sheet, and a valuation that ignores its secular tailwinds, now is the time to position for this undervalued leader.
For long-term investors, the risks—geopolitical uncertainty, headcount management—are manageable. The reward? Riding the wave of structural demand in one of the most resilient sectors of the economy. Buy CRAI and let the tailwinds carry you.
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