Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Carter's (CRI) is a stock many investors are watching right now. CRI is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 11.92. This compares to its industry's average Forward P/E of 17.34. Over the last 12 months, CRI's Forward P/E has been as high as 14.58 and as low as 7.27, with a median of 10.72.
Another notable valuation metric for CRI is its P/B ratio of 1.33. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.38. Within the past 52 weeks, CRI's P/B has been as high as 3.16 and as low as 1.01, with a median of 1.73.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CRI has a P/S ratio of 0.38. This compares to its industry's average P/S of 0.85.
Finally, our model also underscores that CRI has a P/CF ratio of 4.97. 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 13.03. Over the past 52 weeks, CRI's P/CF has been as high as 8.34 and as low as 3.76, with a median of 5.40.
Value investors will likely look at more than just these metrics, but the above data helps show that Carter's is likely undervalued currently. And when considering the strength of its earnings outlook, CRI sticks out as one of the market's strongest value stocks.
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Carter's, Inc. (CRI): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).