Should Value Investors Buy Carter's (CRI) Stock?

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

One company to watch right now is Carter's (CRI). CRI is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 11.92, while its industry has an average P/E of 25.26. Over the past 52 weeks, CRI's Forward P/E has been as high as 14.58 and as low as 7.27, with a median of 10.72.

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 0.42. This compares to its industry's average P/S of 0.77.

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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Carter's, Inc. (CRI): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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