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Is Carter's (CRI) Stock Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Carter's (CRI - Free Report) is a stock many investors are watching right now. CRI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 13.66, which compares to its industry's average of 25.62. Over the past year, CRI's Forward P/E has been as high as 20.90 and as low as 13.66, with a median of 16.32.

Investors should also note that CRI holds a PEG ratio of 1.46. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CRI's industry currently sports an average PEG of 2.27. CRI's PEG has been as high as 2.30 and as low as 1.46, with a median of 1.80, all within the past year.

Investors should also recognize that CRI has a P/B ratio of 5.38. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 11.24. Within the past 52 weeks, CRI's P/B has been as high as 7.55 and as low as 5.38, with a median of 6.23.

Finally, our model also underscores that CRI has a P/CF ratio of 11.39. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. CRI's P/CF compares to its industry's average P/CF of 42.56. Within the past 12 months, CRI's P/CF has been as high as 16.70 and as low as 11.39, with a median of 13.64.

These are just a handful of the figures considered in Carter's's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CRI is an impressive value stock right now.


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