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 48 industry peers in the Textiles, Apparel & Luxury Goods industry. CRI has an excellent financial health rating, but there are some minor concerns on its profitability. CRI has a bad growth rate and is valued cheaply. CRI also has an excellent dividend rating. These ratings would make CRI suitable for value and dividend investing!
1. Profitability
1.1 Basic Checks
In the past year CRI was profitable.
In the past year CRI had a positive cash flow from operations.
Each year in the past 5 years CRI has been profitable.
Each year in the past 5 years CRI had a positive operating cash flow.
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 75.00% of the companies in the same industry.
Looking at the Return On Equity, with a value of 23.26%, CRI is in the better half of the industry, outperforming 79.17% of the companies in the same industry.
CRI's Return On Invested Capital of 12.72% is fine compared to the rest of the industry. CRI outperforms 75.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CRI is in line with the industry average of 13.45%.
| 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 Profit Margin of 5.67%. This is in the better half of the industry: CRI outperforms 62.50% of its industry peers.
CRI's Profit Margin has declined in the last couple of years.
CRI has a better Operating Margin (8.95%) than 60.42% of its industry peers.
In the last couple of years the Operating Margin of CRI has declined.
CRI's Gross Margin of 47.68% is in line compared to the rest of the industry. CRI outperforms 45.83% of its industry peers.
In the last couple of years the Gross Margin of CRI has grown nicely.
| 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
CRI has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it 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.
The debt/assets ratio for CRI has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.26 indicates that CRI is not in any danger for bankruptcy at the moment.
CRI has a Altman-Z score (3.26) which is in line with its industry peers.
CRI has a debt to FCF ratio of 2.25. This is a good value and a sign of high solvency as CRI would need 2.25 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.25, CRI is doing good in the industry, outperforming 72.92% of the companies in the same industry.
CRI has a Debt/Equity ratio of 0.59. This is a neutral value indicating CRI is somewhat dependend on debt financing.
CRI's Debt to Equity ratio of 0.59 is on the low side compared to the rest of the industry. CRI is outperformed by 62.50% of its industry peers.
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 | 3.26 |
ROIC/WACC1.27
WACC9.98%
2.3 Liquidity
CRI has a Current Ratio of 2.56. This indicates that CRI is financially healthy and has no problem in meeting its short term obligations.
CRI has a Current ratio of 2.56. This is in the better half of the industry: CRI outperforms 64.58% of its industry peers.
A Quick Ratio of 1.40 indicates that CRI should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.40, CRI is in the better half of the industry, outperforming 64.58% of the companies in the same industry.
| 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%.
CRI shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -1.36% yearly.
Looking at the last year, CRI shows a decrease in Revenue. The Revenue has decreased by -3.69% in the last year.
Measured over the past years, CRI shows a decrease in Revenue. The Revenue has been decreasing by -4.17% on average per year.
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 -24.84% on average per year.
The Revenue is expected to decrease by -0.86% on average over the next years.
EPS Next Y-45.09%
EPS Next 2Y-35.19%
EPS Next 3Y-24.84%
EPS Next 5YN/A
Revenue Next Year-1.61%
Revenue Next 2Y-1.27%
Revenue Next 3Y-0.86%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
A Price/Earnings ratio of 5.52 indicates a rather cheap valuation of CRI.
97.92% of the companies in the same industry are more expensive than CRI, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 25.82, CRI is valued rather cheaply.
A Price/Forward Earnings ratio of 12.31 indicates a correct valuation of CRI.
Based on the Price/Forward Earnings ratio, CRI is valued a bit cheaper than 70.83% of the companies in the same industry.
CRI's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.52 | ||
| Fwd PE | 12.31 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CRI indicates a rather cheap valuation: CRI is cheaper than 95.83% of the companies listed in the same industry.
CRI's Price/Free Cash Flow ratio is rather cheap when compared to the industry. CRI is cheaper than 89.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.17 | ||
| EV/EBITDA | 3.7 |
4.3 Compensation for Growth
CRI has a very decent profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as CRI's earnings are expected to decrease with -24.84% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-35.19%
EPS Next 3Y-24.84%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 8.82%, CRI is a good candidate for dividend investing.
The stock price of CRI dropped by -39.69% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 3.59, CRI pays a better dividend. On top of this CRI pays more dividend than 97.92% 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 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.82% |
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
58.78% of the earnings are spent on dividend by CRI. 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-35.19%
EPS Next 3Y-24.84%
31.39
-0.97 (-3%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners121.46%
Inst Owner Change-3.12%
Ins Owners1.59%
Ins Owner Change16.74%
Market Cap1.14B
Analysts47.14
Price Target29.58 (-5.77%)
Short Float %15.42%
Short Ratio3.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.82% |
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)-36.61%
PT rev (3m)-47.75%
EPS NQ rev (1m)2.04%
EPS NQ rev (3m)-42.04%
EPS NY rev (1m)-11.35%
EPS NY rev (3m)-33.14%
Revenue NQ rev (1m)0.93%
Revenue NQ rev (3m)0.88%
Revenue NY rev (1m)-1.06%
Revenue NY rev (3m)-1.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.52 | ||
| Fwd PE | 12.31 | ||
| P/S | 0.33 | ||
| P/FCF | 5.17 | ||
| P/OCF | 4.15 | ||
| P/B | 1.35 | ||
| P/tB | 3.28 | ||
| EV/EBITDA | 3.7 |
EPS(TTM)5.69
EY18.13%
EPS(NY)2.55
Fwd EY8.12%
FCF(TTM)6.07
FCFY19.34%
OCF(TTM)7.57
OCFY24.1%
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 | 3.26 |
F-Score7
WACC9.98%
ROIC/WACC1.27
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-45.09%
EPS Next 2Y-35.19%
EPS Next 3Y-24.84%
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-1.61%
Revenue Next 2Y-1.27%
Revenue Next 3Y-0.86%
Revenue Next 5YN/A
EBIT growth 1Y-17.87%
EBIT growth 3Y-16.9%
EBIT growth 5Y-6.69%
EBIT Next Year3.01%
EBIT Next 3Y-0.41%
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%