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what it is
Charles River helps drugmakers test, breed, and support products before they reach patients.
how it gets paid
Last year Charles River Lab made $4.0B in revenue. Discovery & Safety Assessment was the main engine at $2.44B, or 61% of sales.
why growth slowed
Revenue fell 0.9% last year. For much of 2025, performance was marked by flattish sales, as weak demand in the discovery & safety assessment and manufacturing units was partly offset.
what just happened
Charles River posted $3.0B in quarterly revenue, and EPS hit $2.65.
At a glance
B+ balance sheet — decent shape, but not bulletproof
15/100 earnings predictability — expect surprises
15.7x trailing p/e — the market's not buying it — or you found a deal
11.0% return on capital — nothing to write home about
xvary composite: 62/100 — average
What they do
Charles River helps drugmakers test, breed, and support products before they reach patients.
It sits in preclinical testing (tests before human trials), where delays cost real money. Charles River has 130 facilities in 20 countries, and 45% of 2024 sales came from outside the U.S. Leaving is painful because your models, samples, and vendors are already wired into one system.
How they make money
$4.0B
annual revenue · their business grew -0.9% last year
Discovery & Safety Assessment
$2.44B
Research Models & Services
$0.80B
Manufacturing Support
$0.76B
The products that matter
preclinical testing and safety studies
discovery & safety assessment
61% of 2024 sales
this is the main engine. at 61% of sales, it's the segment that decides whether a $4.0B business gets back to growth or stays stuck.
largest segment
research models and lab services
rms
20% of 2024 sales
rms is one-fifth of the company, and management explicitly said shipment timing pressure here is offsetting improvement elsewhere. that makes it small enough to overlook and large enough to matter.
timing matters
manufacturing and quality support
manufacturing support
19% of 2024 sales
this 19% slice helps smooth the story, but it is not big enough to carry the company if the preclinical cycle stays weak. helpful, not heroic.
supporting role
Key numbers
$4.0B
annual revenue
That is the size of the whole machine. One quarter at $3.0B means the business is lumpy.
15.7x
trailing P/E
You are paying 15.7 times last year’s earnings. That is not expensive for healthcare.
$190
target price
That is $29 above the current $161.35 price, or about 18% upside.
11.0%
return on capital
For every $100 put into the business, Charles River earns about $11 before tax.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 30 / 100
- long-term debt $2.2B (22% of capital)
- net profit margin 13.6% — keeps 14 cents of every dollar in revenue
- return on equity 16% — $0.16 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in CRL 3 years ago → it's now worth $6,360.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
Charles River posted $3.0B in quarterly revenue, and EPS hit $2.65.
Revenue rose 201% vs. prior year. EPS rose 141% vs. prior year.
$1.0B
revenue
$2.65
eps
n/a
n/a
the number that mattered
The $3.0B quarter matters because it is 75% of the company’s $4.0B annual revenue base.
-
charles river laboratories closed the book on a so-so year.for much of 2025, performance was marked by flattish sales, as weak demand in the discovery & safety assessment (dsa) and manufacturing units was partly offset by strength in the research models & services (rms) arm. yet, there were signs of stabilization, with management recently noting improved dsa demand trends in the latter half of the year, on higher bookings of early-stage research by global biopharma clients, and a pickup in proposals from small and midsized biotech clients. meanwhile, the company posted adjusted share profit of $2.39 in the final stretch and $10.28 for the full year (down from like-adjusted figures of $2.66 and $10.32 in 2024).
-
the near-term picture looks spotty.
-
at this stage, trends appear to be somewhat uneven.
-
management indicated demand in dsa should continue to move in a positive direction this year.however, it also noted that headwinds in the rms segment (related to the timing of shipments) will likely offset improvement in manufacturing. funding constraints, potential changes to u.s. drug pricing policy, and macro factors add uncertainty for now, too.
-
still, leadership is cautiously upbeat about the second half, buoyed by improving trends, $100 million in cost savings, and recent acquisitions (more below).
source: company earnings report
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What could go wrong
the #1 risk is biotech funding staying tight and preclinical demand staying soft.
med
study demand does not recover
the bull case needs a pickup in outsourced drug-development work. right now revenue is still just $4.0B, down 0.9% last year, and Q4 revenue was only $1.0B.
if quarterly revenue keeps hovering around $1.0B, the stock stays a turnaround debate instead of a clean rebound.
med
rms stays an offset instead of a support
rms is 20% of 2024 sales, and management already said shipment timing pressure there is offsetting improvement in manufacturing support.
when one-fifth of the business is choppy, better performance elsewhere does not flow cleanly into reported growth.
med
policy pressure hits customer budgets
management explicitly called out funding constraints and possible U.S. drug pricing policy changes. charles river sits upstream in research, so sponsor caution tends to show up here early.
with EPS already down 17% from last year in Q4, there is not much room for another budget wobble to hide.
flat revenue in a $4.0B business is manageable for a while. flat revenue with falling EPS is where the multiple stops looking cheap and starts looking suspicious.
source: institutional data · regulatory filings · risk analysis
Pay attention to
trend
whether DSA actually turns positive
management said discovery & safety assessment should improve. at 61% of sales, that is the swing factor.
metric
quarterly revenue above $1.0B
one flat quarter can be noise. several quarters near $1.0B means the recovery is taking its time.
risk
funding and policy headlines
management already flagged funding constraints and possible U.S. drug pricing changes. those are budget signals for customers.
calendar
the next quarter's EPS trend
Q4 EPS was $2.90, down 17% from last year. you want to see that decline stop before calling the reset complete.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — analysts expect above-average price performance in the year ahead. in human-speak: they think the rebound trade still has life.
risk profile
average
stability score 3 — this is not especially safe or especially wild. you are taking normal stock risk with abnormal execution questions.
chart momentum
top 5%
technical score 1 — the chart has improved fast. the quiet part: price momentum is stronger than business momentum right now.
earnings predictability
15 / 100
earnings can be hard to model here. in human-speak: expect surprises, and do not act shocked when guidance moves the stock.
source: institutional data
Institutional activity
283 buyers vs. 236 sellers in 3q2025. total institutional holdings: 50.6M shares.
source: institutional data
Price targets
3-5 year target range
$107
$272
$161
current price
$190
target midpoint · +18% from current · 3-5yr high: $305 (+90% · 17% ann'l return)
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