Reviewing Charles River Laboratories (CRL) & Luna Innovations (LUNA)

Charles River Laboratories (NYSE: CRL) and Luna Innovations (NASDAQ:LUNA) are both medical companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Volatility and Risk

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Charles River Laboratories has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, Luna Innovations has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.

Profitability

This table compares Charles River Laboratories and Luna Innovations’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Charles River Laboratories 6.64% 26.14% 9.09%
Luna Innovations 28.35% -0.56% -0.39%

Earnings and Valuation

This table compares Charles River Laboratories and Luna Innovations’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Charles River Laboratories $1.86 billion 2.74 $123.35 million $5.27 20.35
Luna Innovations $46.23 million 2.05 $14.61 million N/A N/A

Charles River Laboratories has higher revenue and earnings than Luna Innovations.

Institutional and Insider Ownership

99.8% of Charles River Laboratories shares are held by institutional investors. Comparatively, 18.5% of Luna Innovations shares are held by institutional investors. 2.1% of Charles River Laboratories shares are held by insiders. Comparatively, 10.6% of Luna Innovations shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Charles River Laboratories and Luna Innovations, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Charles River Laboratories 0 6 6 0 2.50
Luna Innovations 0 0 1 0 3.00

Charles River Laboratories currently has a consensus target price of $115.83, suggesting a potential upside of 8.00%. Luna Innovations has a consensus target price of $3.25, suggesting a potential downside of 4.41%. Given Charles River Laboratories’ higher probable upside, equities analysts plainly believe Charles River Laboratories is more favorable than Luna Innovations.

Summary

Charles River Laboratories beats Luna Innovations on 8 of the 12 factors compared between the two stocks.

About Charles River Laboratories

Charles River Laboratories International, Inc., an early-stage contract research company, provides drug discovery, non-clinical development, and safety testing services worldwide. It operates through three segments: Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Support (Manufacturing). The RMS segment produces and sells research model strains primarily genetically and microbiologically defined 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 comprising 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 of a druggable target through delivery of non-clinical drug and therapeutic candidates ready for safety assessment; and safety assessment services, which comprise bioanalysis, pharmacokinetics, drug metabolism, toxicology, and pathology services. The Manufacturing segment provides in vitro methods for conventional and rapid quality control testing of sterile and non-sterile biopharmaceuticals, and consumer products. It also offers specialized testing of biologics and devices that are outsourced by pharmaceutical and biotechnology companies; and avian vaccine services that provide specific-pathogen-free fertile chicken eggs, SPF chickens, and diagnostic products used to manufacture vaccines. The company serves pharmaceutical and biotechnology, agricultural and chemical, life science and veterinary medicine, and medical device companies; and contract research and contract manufacturing organizations, diagnostic and other commercial entities, hospitals, academic institutions, and government agencies. Charles River Laboratories International, Inc. was founded in 1947 and is headquartered in Wilmington, Massachusetts.

About Luna Innovations

Luna Innovations Incorporated develops, manufactures and markets fiber optic sensing and test, and measurement products. The Company is focused on bringing technology solutions to measure and monitor processes in the aerospace, automotive, energy, composite, telecommunications and defense industries. The Company operates in two business segments: Products and Licensing, and Technology Development. The Products and Licensing segment develops, manufactures and markets its suite of products, including high-speed optical receiver (HSOR), custom optoelectronic subsystems (Optoelectronics), and Terahertz (THz) products, and fiber optic sensing, as well as test and measurement products. The Technology Development segment performs applied research principally in the areas of sensing and instrumentation, advanced materials and health sciences. The Company’s HSOR transmission products are deployed in the Internet communications equipment infrastructure for high-speed bandwidth.

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