Carter's
CRI
$39.89
+3.42%
Carter's Inc. is a leading specialty retailer of children's apparel, operating under the Carter's and OshKosh B'gosh brands, and selling through retail stores, eCommerce, and wholesale channels across the U.S. and internationally. As the largest branded marketer of baby and young children's clothing in North America, the company holds a dominant market position, with a multi-channel model that reaches a broad consumer base. Currently, the stock is attracting attention due to a significant recovery from its 52-week low, driven by improving operational performance and a favorable consumer spending environment, though concerns about rising costs and competitive pressures remain central to the investor debate.…
CRI
Carter's
$39.89
Related headlines
CRI 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Carter's's 12-month outlook, with a consensus price target around $42.67 and implied upside of +7.0% versus the current price.
Average Target
$42.67
0 analysts
Implied Upside
+7.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$30 - $53
Analyst target range
Carter's has coverage from 6 analysts, with a consensus recommendation of 'hold' (mean rating of 2.57 on a 1-5 scale, where 1 is strong buy and 5 is sell). The average target price is $42.67, implying an upside of 10.6% from the current price of $38.57. The target price range spans from a low of $30.00 to a high of $53.00, with the high target suggesting potential for significant upside if the company exceeds expectations, while the low target reflects downside risks from competitive pressures or economic downturn. The wide spread between the low and high targets (23 points) indicates high uncertainty among analysts, and the 'hold' consensus suggests that the stock is fairly valued at current levels, with limited near-term catalysts.
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Bulls vs Bears: CRI Investment Factors
Carter's presents a mixed picture: it is fundamentally undervalued with strong cash generation and a solid balance sheet, but its growth prospects are limited and analyst sentiment is cautious. The bull case is supported by the significant valuation discount and positive momentum, while the bear case hinges on the lack of growth catalysts and competitive risks. Currently, the evidence slightly favors the bull side due to the compelling valuation and financial stability, but the key tension is whether the company can reignite growth to justify a re-rating. If revenue growth remains stagnant, the stock may stay range-bound; if it accelerates, the upside could be substantial.
Bullish
- Significant undervaluation vs peers: CRI trades at a trailing P/E of 12.8x and forward P/E of 10.6x, a 36% discount to the specialty retail industry average of ~20x. This suggests the market is pricing in lower growth, but the discount may be excessive given the company's stable profitability and strong cash generation.
- Strong price recovery and momentum: The stock is up 59.1% over the past year, far outperforming the S&P 500's 18.2% gain. It has rebounded sharply from its February 2026 low of $33.55 and currently sits at 87% of its 52-week range, indicating positive investor sentiment and a sustained uptrend.
- Solid profitability and cash flow: Gross margin is healthy at 45.4%, and the company generates positive free cash flow with a price-to-cash-flow ratio of 9.6. Net margin of 3.2% and operating margin of 5.0% demonstrate efficient cost management, supporting the dividend with a payout ratio of 61.4%.
- Strong liquidity and manageable debt: The current ratio of 2.51 indicates robust short-term liquidity, while debt-to-equity of 1.31 is moderate for the retail sector. This financial stability provides a cushion against economic downturns and supports continued operations and shareholder returns.
Bearish
- Low growth and mature market: Revenue is estimated at $3.09 billion, reflecting a mature, steady business with limited growth prospects. The negative PEG ratio of -0.26 indicates that earnings are expected to decline, which could justify the low valuation and cap upside potential.
- High uncertainty among analysts: The consensus recommendation is 'hold' with a mean rating of 2.57, and the target price range is wide ($30 to $53), reflecting high uncertainty. This suggests that analysts are not confident in the company's near-term prospects, limiting the stock's appeal to growth-oriented investors.
- Recent price volatility and drawdown risk: The stock experienced a max drawdown of -30.3% over the past year, and the 1-month price change is -6.2%, indicating recent weakness. The stock's beta of 0.85 suggests it is less volatile than the market, but the drawdown highlights the risk of sharp declines.
- Competitive pressures in retail: The specialty retail industry is highly competitive, with pressure from online retailers and discount chains. CRI's operating margin of 5.0% is relatively thin, leaving little room for error if competition intensifies or costs rise.
CRI Technical Analysis
Carter's has exhibited a strong recovery trend over the past year, with the stock price up 59.1% over the 1-year period, significantly outperforming the S&P 500's 18.2% gain. The current price of $38.57 sits at 87% of its 52-week range (low of $23.38, high of $44.44), indicating the stock is trading near the upper end of its yearly range, which typically reflects positive momentum and investor confidence, though it also suggests the stock may be approaching overbought conditions. The 6-month price change of 11.4% and the 3-month change of 14.4% confirm a sustained uptrend, with the stock having rebounded sharply from its February 2026 low of $33.55.
Beta
0.85
0.85x market volatility
Max Drawdown
-30.3%
Largest decline past year
52-Week Range
$24-$44
Price range past year
Annual Return
+68.7%
Cumulative gain past year
| Period | CRI Return | S&P 500 |
|---|---|---|
| 1m | -1.9% | +1.7% |
| 3m | +19.6% | +4.7% |
| 6m | +3.7% | +10.4% |
| 1y | +68.7% | +21.9% |
| ytd | +20.2% | +11.1% |
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CRI Fundamental Analysis
Carter's revenue trajectory has been stable, with the most recent quarterly revenue estimated at $3.09 billion (based on analyst estimates), reflecting a mature, steady business. The company's gross margin stands at 45.4%, which is healthy for the specialty retail industry, while operating margin is 4.97%, indicating efficient cost management. Net income is positive, with a net margin of 3.17%, and the company has demonstrated consistent profitability, with EPS of $0.078 in the most recent quarter. The balance sheet shows a debt-to-equity ratio of 1.31, which is moderate, and a current ratio of 2.51, indicating strong liquidity. Free cash flow is positive, as evidenced by a price-to-cash-flow ratio of 9.62, and the company generates sufficient cash to cover its dividend, which has a payout ratio of 61.4%.
Quarterly Revenue
N/A
N/A
Revenue YoY Growth
N/A
YoY Comparison
Gross Margin
N/A
Latest Quarter
Free Cash Flow
N/A
Last 12 Months
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Valuation Analysis: Is CRI Overvalued?
Given that Carter's has positive net income, the trailing P/E ratio of 12.8x is the primary valuation metric, with a forward P/E of 10.6x, implying the market expects earnings growth. The stock trades at a significant discount to the specialty retail industry average P/E of approximately 20x, representing a 36% discount, which may be justified by the company's lower growth prospects compared to faster-growing peers. Historically, Carter's has traded at a higher P/E range, and the current multiple is near the lower end of its 5-year band, suggesting the stock is undervalued relative to its own history, potentially offering a value opportunity if the company can maintain its earnings stability.
PE
12.8x
Latest Quarter
vs. Historical
N/A
5-Year PE Range 17x~59x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
9.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks: CRI's debt-to-equity ratio of 1.31 is moderate, but the company's net margin of 3.2% is thin, leaving limited buffer against cost inflation or sales declines. The payout ratio of 61.4% indicates that a significant portion of earnings is returned to shareholders, which could constrain reinvestment and dividend sustainability if earnings drop. Revenue concentration in the U.S. Wholesale segment (majority of revenue) exposes the company to retail sector cyclicality and the health of key wholesale partners. Additionally, the negative PEG ratio suggests expected earnings decline, which could pressure the stock if realized.
