CARTER'S INC (CRI) Stock Fundamental Analysis
NYSE:CRI - New York Stock Exchange, Inc. - US1462291097 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to CRI. CRI was compared to 50 industry peers in the Textiles, Apparel & Luxury Goods industry. While CRI has a great health rating, its profitability is only average at the moment. CRI is valued quite cheap, but it does not seem to be growing. CRI also has an excellent dividend rating. These ratings would make CRI suitable for value and dividend investing!
1. Profitability
1.1 Basic Checks
CRI had positive earnings in the past year.
CRI had a positive operating cash flow in the past year.
In the past 5 years CRI has always been profitable.
In the past 5 years CRI always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.45%, CRI is in the better half of the industry, outperforming 78.00% of the companies in the same industry.
With an excellent Return On Equity value of 23.26%, CRI belongs to the best of the industry, outperforming 82.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 12.72%, CRI is in the better half of the industry, outperforming 74.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CRI is above the industry average of 11.17%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.45% | ||
| ROE | 23.26% | ||
| ROIC | 12.72% |
ROA(3y)9.05%
ROA(5y)8.18%
ROE(3y)26.4%
ROE(5y)25.22%
ROIC(3y)13.75%
ROIC(5y)13.22%
1.3 Margins
CRI has a better Profit Margin (5.67%) than 64.00% of its industry peers.
In the last couple of years the Profit Margin of CRI has declined.
Looking at the Operating Margin, with a value of 8.95%, CRI is in the better half of the industry, outperforming 62.00% of the companies in the same industry.
CRI's Operating Margin has declined in the last couple of years.
CRI has a Gross Margin (47.68%) which is in line with its industry peers.
CRI's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.95% | ||
| PM (TTM) | 5.67% | ||
| GM | 47.68% |
OM growth 3Y-11.06%
OM growth 5Y-2.63%
PM growth 3Y-12.75%
PM growth 5Y-2.95%
GM growth 3Y0.38%
GM growth 5Y2.29%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CRI is creating some value.
Compared to 1 year ago, CRI has less shares outstanding
CRI has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, CRI has an improved debt to assets ratio.
2.2 Solvency
CRI has an Altman-Z score of 3.27. This indicates that CRI is financially healthy and has little risk of bankruptcy at the moment.
CRI has a better Altman-Z score (3.27) than 64.00% of its industry peers.
The Debt to FCF ratio of CRI is 2.25, which is a good value as it means it would take CRI, 2.25 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of CRI (2.25) is better than 72.00% of its industry peers.
A Debt/Equity ratio of 0.59 indicates that CRI is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.59, CRI is doing worse than 62.00% of the companies in the same industry.
Although CRI does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 2.25 | ||
| Altman-Z | 3.27 |
ROIC/WACC1.44
WACC8.84%
2.3 Liquidity
A Current Ratio of 2.56 indicates that CRI has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.56, CRI is in the better half of the industry, outperforming 66.00% of the companies in the same industry.
CRI has a Quick Ratio of 1.40. This is a normal value and indicates that CRI is financially healthy and should not expect problems in meeting its short term obligations.
CRI has a better Quick ratio (1.40) than 62.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.56 | ||
| Quick Ratio | 1.4 |
3. Growth
3.1 Past
CRI shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -9.39%.
The Earnings Per Share has been decreasing by -1.36% on average over the past years.
The Revenue has decreased by -3.69% in the past year.
The Revenue has been decreasing by -4.17% on average over the past years.
EPS 1Y (TTM)-9.39%
EPS 3Y-8.37%
EPS 5Y-1.36%
EPS Q2Q%-36.54%
Revenue 1Y (TTM)-3.69%
Revenue growth 3Y-6.56%
Revenue growth 5Y-4.17%
Sales Q2Q%-4.79%
3.2 Future
Based on estimates for the next years, CRI will show a very negative growth in Earnings Per Share. The EPS will decrease by -24.22% on average per year.
Based on estimates for the next years, CRI will show a decrease in Revenue. The Revenue will decrease by -0.73% on average per year.
EPS Next Y-43.8%
EPS Next 2Y-33.74%
EPS Next 3Y-24.22%
EPS Next 5YN/A
Revenue Next Year-1.23%
Revenue Next 2Y-1.02%
Revenue Next 3Y-0.73%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 5.60, the valuation of CRI can be described as very cheap.
Based on the Price/Earnings ratio, CRI is valued cheaper than 96.00% of the companies in the same industry.
CRI's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.41.
Based on the Price/Forward Earnings ratio of 11.96, the valuation of CRI can be described as reasonable.
Based on the Price/Forward Earnings ratio, CRI is valued a bit cheaper than the industry average as 76.00% of the companies are valued more expensively.
CRI's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 35.19.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.6 | ||
| Fwd PE | 11.96 |
4.2 Price Multiples
96.00% of the companies in the same industry are more expensive than CRI, based on the Enterprise Value to EBITDA ratio.
CRI's Price/Free Cash Flow ratio is rather cheap when compared to the industry. CRI is cheaper than 94.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.25 | ||
| EV/EBITDA | 3.74 |
4.3 Compensation for Growth
The decent profitability rating of CRI may justify a higher PE ratio.
CRI's earnings are expected to decrease with -24.22% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-33.74%
EPS Next 3Y-24.22%
5. Dividend
5.1 Amount
CRI has a Yearly Dividend Yield of 8.00%, which is a nice return.
Compared to an average industry Dividend Yield of 3.55, CRI pays a better dividend. On top of this CRI pays more dividend than 96.00% of the companies listed in the same industry.
CRI's Dividend Yield is rather good when compared to the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8% |
5.2 History
The dividend of CRI is nicely growing with an annual growth rate of 16.75%!
CRI has been paying a dividend for at least 10 years, so it has a reliable track record.
CRI has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)16.75%
Div Incr Years1
Div Non Decr Years4
5.3 Sustainability
CRI pays out 58.78% of its income as dividend. This is a bit on the high side, but may be sustainable.
CRI's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP58.78%
EPS Next 2Y-33.74%
EPS Next 3Y-24.22%
31.87
-0.97 (-2.95%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners116.39%
Inst Owner Change0%
Ins Owners2.6%
Ins Owner Change18.27%
Market Cap1.16B
Analysts47.14
Price Target30.19 (-5.27%)
Short Float %12.78%
Short Ratio2.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8% |
Yearly Dividend3.2
Dividend Growth(5Y)16.75%
DP58.78%
Div Incr Years1
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)28.6%
Min EPS beat(2)23.39%
Max EPS beat(2)33.81%
EPS beat(4)4
Avg EPS beat(4)32.42%
Min EPS beat(4)19.02%
Max EPS beat(4)53.46%
EPS beat(8)8
Avg EPS beat(8)25.48%
EPS beat(12)10
Avg EPS beat(12)23.14%
EPS beat(16)14
Avg EPS beat(16)25.97%
Revenue beat(2)1
Avg Revenue beat(2)0.79%
Min Revenue beat(2)-0.04%
Max Revenue beat(2)1.63%
Revenue beat(4)1
Avg Revenue beat(4)-0.17%
Min Revenue beat(4)-1.64%
Max Revenue beat(4)1.63%
Revenue beat(8)2
Avg Revenue beat(8)-0.3%
Revenue beat(12)4
Avg Revenue beat(12)-0.3%
Revenue beat(16)7
Avg Revenue beat(16)-0.21%
PT rev (1m)0%
PT rev (3m)-35.3%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.04%
EPS NY rev (1m)2.35%
EPS NY rev (3m)-11.63%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.54%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.6 | ||
| Fwd PE | 11.96 | ||
| P/S | 0.33 | ||
| P/FCF | 5.25 | ||
| P/OCF | 4.21 | ||
| P/B | 1.37 | ||
| P/tB | 3.33 | ||
| EV/EBITDA | 3.74 |
EPS(TTM)5.69
EY17.85%
EPS(NY)2.66
Fwd EY8.36%
FCF(TTM)6.07
FCFY19.05%
OCF(TTM)7.57
OCFY23.74%
SpS95.33
BVpS23.25
TBVpS9.57
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.45% | ||
| ROE | 23.26% | ||
| ROCE | 16.17% | ||
| ROIC | 12.72% | ||
| ROICexc | 15.26% | ||
| ROICexgc | 22.16% | ||
| OM | 8.95% | ||
| PM (TTM) | 5.67% | ||
| GM | 47.68% | ||
| FCFM | 6.37% |
ROA(3y)9.05%
ROA(5y)8.18%
ROE(3y)26.4%
ROE(5y)25.22%
ROIC(3y)13.75%
ROIC(5y)13.22%
ROICexc(3y)16.52%
ROICexc(5y)18.31%
ROICexgc(3y)24.79%
ROICexgc(5y)28.26%
ROCE(3y)17.48%
ROCE(5y)16.81%
ROICexcg growth 3Y-19.15%
ROICexcg growth 5Y0.36%
ROICexc growth 3Y-17.36%
ROICexc growth 5Y-0.7%
OM growth 3Y-11.06%
OM growth 5Y-2.63%
PM growth 3Y-12.75%
PM growth 5Y-2.95%
GM growth 3Y0.38%
GM growth 5Y2.29%
F-Score7
Asset Turnover1.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 2.25 | ||
| Debt/EBITDA | 1.36 | ||
| Cap/Depr | 96.71% | ||
| Cap/Sales | 1.57% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 75.08% | ||
| Profit Quality | 112.24% | ||
| Current Ratio | 2.56 | ||
| Quick Ratio | 1.4 | ||
| Altman-Z | 3.27 |
F-Score7
WACC8.84%
ROIC/WACC1.44
Cap/Depr(3y)84.08%
Cap/Depr(5y)65.4%
Cap/Sales(3y)1.75%
Cap/Sales(5y)1.49%
Profit Quality(3y)119.52%
Profit Quality(5y)187.79%
High Growth Momentum
Growth
EPS 1Y (TTM)-9.39%
EPS 3Y-8.37%
EPS 5Y-1.36%
EPS Q2Q%-36.54%
EPS Next Y-43.8%
EPS Next 2Y-33.74%
EPS Next 3Y-24.22%
EPS Next 5YN/A
Revenue 1Y (TTM)-3.69%
Revenue growth 3Y-6.56%
Revenue growth 5Y-4.17%
Sales Q2Q%-4.79%
Revenue Next Year-1.23%
Revenue Next 2Y-1.02%
Revenue Next 3Y-0.73%
Revenue Next 5YN/A
EBIT growth 1Y-17.87%
EBIT growth 3Y-16.9%
EBIT growth 5Y-6.69%
EBIT Next Year-8.9%
EBIT Next 3Y-8.38%
EBIT Next 5YN/A
FCF growth 1Y-10.76%
FCF growth 3Y1.66%
FCF growth 5Y-5.73%
OCF growth 1Y-6.35%
OCF growth 3Y3.65%
OCF growth 5Y-5.05%