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As of today (2024-04-27), CRA International's intrinsic value calculated from the Discounted Cash Flow model is $237.64.
Note: Discounted Cash Flow model is only suitable for predictable companies (Business Predictability Rank higher than 1-Star). If the company's predictability rank is 1-Star or Not Rated, result may not be accurate due to the low predictability of business and the data will not be stored into our database.
CRA International's Predictability Rank is 4.5-Stars.
Margin of Safety (FCF Based) using Discounted Cash Flow model for CRA International is 37.00%.
The industry rank for CRA International's Intrinsic Value: DCF (FCF Based) or its related term are showing as below:
The historical data trend for CRA International's Intrinsic Value: DCF (FCF Based) can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
CRA International Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Intrinsic Value: DCF (FCF Based) | Get a 7-Day Free Trial | - | - | - | - | 261.29 |
CRA International Quarterly Data | ||||||||||||||||||||
Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | |
Intrinsic Value: DCF (FCF Based) | Get a 7-Day Free Trial | - | - | - | - | 261.29 |
For the Consulting Services subindustry, CRA International's Price-to-DCF (FCF Based), along with its competitors' market caps and Price-to-DCF (FCF Based) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the Business Services industry and Industrials sector, CRA International's Price-to-DCF (FCF Based) distribution charts can be found below:
* The bar in red indicates where CRA International's Price-to-DCF (FCF Based) falls into.
This is the intrinsic value calculated from the Discounted Cash Flow model with default parameters. In a discounted cash flow model, the future cash flow is estimated based on a cash flow growth rate and a discount rate. The cash flow of the future is discounted to its current value at the discount rate. All of the discounted future cash flow is added together to get the current intrinsic value of the company.
Usually a two-stage model is used when calculating a stock's intrinsic value using a discounted cash flow model. The first stage is called the growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.
GuruFocus DCF calculator is a two-stage model. The default values are defined as:
1. Discount Rate: d = 11%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.66%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.
2. Growth Rate in the growth stage: g1 = 18.50%
The Growth Rate in the growth stage is initially set as the default 10-Year FCF Growth Rate (Per Share). In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year FCF Growth Rate (Per Share). If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year FCF Growth Rate (Per Share).
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=>
CRA International's average Free Cash Flow Growth Rate in the past
10 years was 18.50%,
which is between 5% and 20%. => GuruFocus defaults => Growth Rate: 18.50%
3. Years of Growth Stage: y1 = 10
4. Terminal Growth Rate: g2 = 4%
5. Years of Terminal Growth: y2 = 10
6. Free Cash Flow per Share: fcf = $8.410.
However, GuruFocus DCF calculator is actually a Discounted Earnings calculator, the EPS without NRI is used as the default. The reason we are doing this is we found that historically stock prices are more correlated with earnings than free cash flow.
All of the default settings can be changed and the results are calculated automatically.
CRA International's Intrinsic Value: DCF (FCF Based) for today is calculated as
Intrinsic Value: DCF (FCF Based) | = | Free Cash Flow per Share | * | {[(1+g1)/(1+d) | + | (1+g1)^2/(1+d)^2 | + | ... | + | (1+g1)^10/(1+d)^10] |
+ | (1+g1)^10/(1+d)^10 | * | [(1+g2)/(1+d) | + | (1+g2)^2/(1+d)^2 | + | ... | + | (1+g2)^10/(1+d)^10]} |
set x = (1+g1)/(1+d) = (1+0.185)/(1+0.11) = 1.0675675675676
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694
Intrinsic Value: DCF (FCF Based) | = | Free Cash Flow per Share | * | {[x | + | x^2 | + | ... | + | x^10] | + | x^10 | * | [y | + | y^2 | + | ... | + | y^10]} |
= | Free Cash Flow per Share | * | [x | * | (1-x^10) | / | (1-x) | + | x^10 | * | y | * | (1-y^10) | / | (1-y)] | |||||
= | 8.410 | * | 28.2569 | |||||||||||||||||
= | 237.64 |
Margin of Safety (FCF Based) | = | (Intrinsic Value: DCF (FCF Based) | - | Current Price) | / | Intrinsic Value: DCF (FCF Based) |
= | (237.64 | - | 149.71) | / | 237.64 | |
= | 37.00 % |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
CRA International (NAS:CRAI) Intrinsic Value: DCF (FCF Based) Explanation
Unlike valuation methods such as Net Current Asset Value, Tangible Book per Share, Graham Number, Median PS Value etc, discounted Cash Flow model evaluates the companies based on their future earnings power instead of their assets.
Be Aware
What you need to know about the DCF model:
1. The DCF model evaluates a company based on its future earnings powerYou can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.
Thank you for viewing the detailed overview of CRA International's Intrinsic Value: DCF (FCF Based) provided by GuruFocus.com. Please click on the following links to see related term pages.
Paul A Maleh | officer: EVP, Platform Leader | 200 CLARENDON STREET, T-9, BOSTON MA 02116 |
Chad M Holmes | officer: CFO, EVP and Treasurer | 200 CLARENDON STREET, T-9, BOSTON MA 02116 |
Jonathan D Yellin | officer: EVP and General Counsel | 200 CLARENDON STREET, T-9, BOSTON MA 02116 |
Thomas Aiken Avery | director | 465 LAUREL CHASE COURT, ATLANTA GA 30327 |
Heather Tookes | director | C/O FTAC OLYMPUS ACQUISITION CORP., 2929 ARCH STREET, SUITE 1703, PHILADELPHIA PA 19104 |
Robert W Holthausen | director | 200 CLARENDON STREET, T-9, BOSTON MA 02116 |
Alva Taylor | director | C/O CRA INTERNATIONAL, INC., 200 CLARENDON STREET, BOSTON MA 02116 |
Nancy Hawthorne | director | AVID TECHNOLOGY, INC., 75 NETWORK DRIVE, BURLINGTON MA 01803 |
Christine Rose Detrick | director | 200 CLARENDON STREET, T-9, BOSTON MA 02116 |
Daniel K. Mahoney | officer: CFO, EVP and Treasurer | C/O OLD MUTUAL ASSET MANAGEMENT, 200 CLARENDON STREET, BOSTON MA 02116 |
Richard Douglas Booth | director | 200 CLARENDON STREET, T-9, BOSTON MA 02116 |
William F Concannon | director | 200 PARK AVENUE, 17TH FLOOR, NEW YORK NY 10166 |
Rowland Moriarty | director | 200 CLARENDON ST T33, BOSTON MA 02116 |
Robert A Whitman | director | 4200 TEXAS COMMERCE TOWER WEST, 2200 ROSS AVE, DALLAS TX 75201 |
Douglas C Miller | officer: VP, Chief Accounting Officer | ONE AMERICAN ROW, P.O. BOX 5056, HARTFORD CT 06052 |
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