CARTER'S INC (CRI) Stock Fundamental Analysis
NYSE:CRI - New York Stock Exchange, Inc. - US1462291097 - Common Stock - Currency: USD
CRI gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 49 industry peers in the Textiles, Apparel & Luxury Goods industry. Both the health and profitability get an excellent rating, making CRI a very profitable company, without any liquidiy or solvency issues. CRI is valued quite cheap, but it does not seem to be growing. Finally CRI also has an excellent dividend rating. This makes CRI very considerable for value and dividend investing!
1. Profitability
1.1 Basic Checks
CRI had positive earnings in the past year.
In the past year CRI had a positive cash flow from operations.
CRI had positive earnings in each of the past 5 years.
Each year in the past 5 years CRI had a positive operating cash flow.
1.2 Ratios
CRI has a better Return On Assets (9.01%) than 79.17% of its industry peers.
CRI has a Return On Equity of 25.65%. This is amongst the best in the industry. CRI outperforms 81.25% of its industry peers.
CRI has a better Return On Invested Capital (13.89%) than 77.08% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CRI is above the industry average of 11.69%.
The last Return On Invested Capital (13.89%) for CRI is above the 3 year average (13.75%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.01% | ||
| ROE | 25.65% | ||
| ROIC | 13.89% |
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
The Profit Margin of CRI (6.25%) is better than 70.83% of its industry peers.
CRI's Profit Margin has declined in the last couple of years.
CRI has a Operating Margin of 9.69%. This is in the better half of the industry: CRI outperforms 68.75% of its industry peers.
CRI's Operating Margin has declined in the last couple of years.
The Gross Margin of CRI (47.93%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of CRI has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.69% | ||
| PM (TTM) | 6.25% | ||
| GM | 47.93% |
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.
The number of shares outstanding for CRI has been reduced compared to 1 year ago.
Compared to 5 years ago, CRI has less shares outstanding
Compared to 1 year ago, CRI has an improved debt to assets ratio.
2.2 Solvency
CRI has an Altman-Z score of 3.29. This indicates that CRI is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of CRI (3.29) is better than 70.83% of its industry peers.
The Debt to FCF ratio of CRI is 2.05, which is a good value as it means it would take CRI, 2.05 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 2.05, CRI is doing good in the industry, outperforming 68.75% of the companies in the same industry.
CRI has a Debt/Equity ratio of 0.58. This is a neutral value indicating CRI is somewhat dependend on debt financing.
CRI's Debt to Equity ratio of 0.58 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 | 0.58 | ||
| Debt/FCF | 2.05 | ||
| Altman-Z | 3.29 |
ROIC/WACC1.46
WACC9.48%
2.3 Liquidity
CRI has a Current Ratio of 2.25. This indicates that CRI is financially healthy and has no problem in meeting its short term obligations.
CRI has a better Current ratio (2.25) than 64.58% of its industry peers.
A Quick Ratio of 1.26 indicates that CRI should not have too much problems paying its short term obligations.
CRI has a Quick ratio of 1.26. This is comparable to the rest of the industry: CRI outperforms 58.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.25 | ||
| Quick Ratio | 1.26 |
3. Growth
3.1 Past
CRI shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.41%.
The Earnings Per Share has been decreasing by -1.36% on average over the past years.
CRI shows a decrease in Revenue. In the last year, the revenue decreased by -3.73%.
CRI shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -4.17% yearly.
EPS 1Y (TTM)-2.41%
EPS 3Y-8.37%
EPS 5Y-1.36%
EPS Q2Q%-6.16%
Revenue 1Y (TTM)-3.73%
Revenue growth 3Y-6.56%
Revenue growth 5Y-4.17%
Sales Q2Q%0.22%
3.2 Future
Based on estimates for the next years, CRI will show a decrease in Earnings Per Share. The EPS will decrease by -6.88% on average per year.
Based on estimates for the next years, CRI will show a small growth in Revenue. The Revenue will grow by 0.79% on average per year.
EPS Next Y-17.88%
EPS Next 2Y-6.88%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-0.42%
Revenue Next 2Y0.79%
Revenue Next 3YN/A
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
The Price/Earnings ratio is 6.80, which indicates a rather cheap valuation of CRI.
CRI's Price/Earnings ratio is rather cheap when compared to the industry. CRI is cheaper than 93.75% of the companies in the same industry.
When comparing the Price/Earnings ratio of CRI to the average of the S&P500 Index (29.98), we can say CRI is valued rather cheaply.
The Price/Forward Earnings ratio is 8.28, which indicates a very decent valuation of CRI.
89.58% of the companies in the same industry are more expensive than CRI, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.66, CRI is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.8 | ||
| Fwd PE | 8.28 |
4.2 Price Multiples
CRI's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. CRI is cheaper than 97.92% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CRI indicates a rather cheap valuation: CRI is cheaper than 85.42% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.13 | ||
| EV/EBITDA | 3.95 |
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 -6.88% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-6.88%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 7.75%, CRI is a good candidate for dividend investing.
The stock price of CRI dropped by -24.37% 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 3.09, CRI pays a better dividend. On top of this CRI pays more dividend than 97.92% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.30, CRI pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.75% |
5.2 History
On average, the dividend of CRI grows each year by 16.75%, which is quite nice.
CRI has paid a dividend for at least 10 years, which is 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
53.01% of the earnings are spent on dividend by CRI. This is a bit on the high side, but may be sustainable.
The Dividend Rate of CRI has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP53.01%
EPS Next 2Y-6.88%
EPS Next 3YN/A
41.27
-0.88 (-2.09%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners121.46%
Inst Owner Change7.87%
Ins Owners1.59%
Ins Owner Change7.24%
Market Cap1.49B
Analysts49.23
Price Target56.61 (37.17%)
Short Float %14.66%
Short Ratio4.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.75% |
Yearly Dividend3.2
Dividend Growth(5Y)16.75%
DP53.01%
Div Incr Years1
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)26.42%
Min EPS beat(2)19.02%
Max EPS beat(2)33.81%
EPS beat(4)4
Avg EPS beat(4)34.98%
Min EPS beat(4)19.02%
Max EPS beat(4)53.46%
EPS beat(8)8
Avg EPS beat(8)30.59%
EPS beat(12)10
Avg EPS beat(12)22.72%
EPS beat(16)14
Avg EPS beat(16)57.01%
Revenue beat(2)1
Avg Revenue beat(2)0.51%
Min Revenue beat(2)-0.62%
Max Revenue beat(2)1.63%
Revenue beat(4)2
Avg Revenue beat(4)0.41%
Min Revenue beat(4)-1.64%
Max Revenue beat(4)2.26%
Revenue beat(8)3
Avg Revenue beat(8)0.48%
Revenue beat(12)5
Avg Revenue beat(12)-0.04%
Revenue beat(16)8
Avg Revenue beat(16)0.88%
PT rev (1m)0%
PT rev (3m)-1.33%
EPS NQ rev (1m)-28.22%
EPS NQ rev (3m)-28.22%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.44%
Revenue NQ rev (1m)-4.61%
Revenue NQ rev (3m)-4.61%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.8 | ||
| Fwd PE | 8.28 | ||
| P/S | 0.42 | ||
| P/FCF | 6.13 | ||
| P/OCF | 4.98 | ||
| P/B | 1.74 | ||
| P/tB | 4.18 | ||
| EV/EBITDA | 3.95 |
EPS(TTM)6.07
EY14.71%
EPS(NY)4.98
Fwd EY12.08%
FCF(TTM)6.73
FCFY16.31%
OCF(TTM)8.29
OCFY20.09%
SpS97.27
BVpS23.71
TBVpS9.88
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.01% | ||
| ROE | 25.65% | ||
| ROCE | 17.66% | ||
| ROIC | 13.89% | ||
| ROICexc | 17.68% | ||
| ROICexgc | 26.38% | ||
| OM | 9.69% | ||
| PM (TTM) | 6.25% | ||
| GM | 47.93% | ||
| FCFM | 6.92% |
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 Turnover1.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 2.05 | ||
| Debt/EBITDA | 1.25 | ||
| Cap/Depr | 96.96% | ||
| Cap/Sales | 1.6% | ||
| Interest Coverage | 11.52 | ||
| Cash Conversion | 75.13% | ||
| Profit Quality | 110.7% | ||
| Current Ratio | 2.25 | ||
| Quick Ratio | 1.26 | ||
| Altman-Z | 3.29 |
F-Score7
WACC9.48%
ROIC/WACC1.46
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)-2.41%
EPS 3Y-8.37%
EPS 5Y-1.36%
EPS Q2Q%-6.16%
EPS Next Y-17.88%
EPS Next 2Y-6.88%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-3.73%
Revenue growth 3Y-6.56%
Revenue growth 5Y-4.17%
Sales Q2Q%0.22%
Revenue Next Year-0.42%
Revenue Next 2Y0.79%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-10.53%
EBIT growth 3Y-16.9%
EBIT growth 5Y-6.69%
EBIT Next Year18.5%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-48.3%
FCF growth 3Y1.66%
FCF growth 5Y-5.73%
OCF growth 1Y-43.53%
OCF growth 3Y3.65%
OCF growth 5Y-5.05%