5 models fit Carter's Inc. Common Stock and they disagree: 2 of 5 land within 15% of the average.
Two or more of our models back this value.
Near fair value(i)Bronze59
Valued as a mature, profitable company: Discounted cash flow, P/E comparison, EV/EBITDA comparison, Graham number, and Dividend discount.
ACCE opinionCarter's Inc. Common Stock (CRI)
Fair value (5 models)
$35.27
ACCE price target
$33.00
Rating
Fairly valued
Horizon
12 months
Fair value published on 20 Oct 2026, 14:06 CEST; previously $33.71 since 15 Oct 2026, 00:00 CEST.
ACCE price target published on 12 Oct 2026, 00:00 CEST.
Rating published on 20 Oct 2026, 14:06 CEST.
Price used: $32.60 at the close on 23 Oct 2026, 22:00 CEST.
Models: Discounted cash flow, P/E comparison, EV/EBITDA comparison, Graham number, and Dividend discount.
Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
Price vs fair value
7.6% below
+8.2% to fair value
ACCE score
65
out of 100
Analysts
38% buy
8 covering
P/E
6.1x
forward 9.4x
1-year return
+2.6%
Dividend yield
2.95%
Carter's Inc. Common Stock in four questions
Plain answers, details below
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Overview
ACCE thesis
Carter's sells children's apparel under its namesake brand and through OshKosh B'gosh, sold mainly through its own stores, e-commerce and wholesale accounts. The thesis rests on a durable niche: a specialist in babies and young kids with a 48.6% gross margin and a 23.7% operating margin, numbers well above what a typical mall apparel retailer earns. Revenue growth of 5.2% is respectable for a mature category, and the business is returning capital at a 20.7% ROE. The trailing P/E of 6.1 looks cheap against a forward P/E of 16.4, which means earnings are expected to fall sharply from trailing levels, so the gap needs checking before anyone reads it as value. The shares are not in any major index, which keeps coverage thin and may explain part of the discount. This is worth a deeper look to test whether trailing earnings are inflated by one-off items and whether the forward estimate is realistic.
⚠ Investor warnings · 3 flagsAI-assisted·How I use AI
high
Short interest elevated
Short interest stands at 25.0% of shares. A quarter of the float is positioned against the stock, which raises the risk of sharp moves in either direction.
moderate
Leverage high for growth profile
Debt/Equity is 1.31 and revenue grew 5.2% year on year, with a five-year revenue CAGR of -0.8%. The balance sheet carries more debt than the top line has justified.
moderate
Quarterly revenue sharply down
Revenue fell 9.6% quarter on quarter. That sits oddly against the 5.2% annual gain and deserves a closer look at the trend within the year.
AI research notes
AI-assisted·How I use AIWritten Oct 19, 2026 · figures from 2026-06-30 · prices to Oct 23, 2026
Why it could do well
Revenue grew 5.2% year over year, a clear turn after a five-year average that shrank 0.8% a year.
The stock trades at a forward P/E of 16.4x, below the sector median of 17.6x, and it pays a 3.1% dividend yield.
Latest quarterly earnings beat expectations by 750.0%, and the analysts' mean price target sits 29.0% above the share price.
Why it could disappoint
Return on invested capital is only 3.5%, well short of the 20.7% return on equity, which hints that debt is doing much of the work.
Debt to equity of 1.31 leaves little room to absorb a margin squeeze if input costs or tariffs on imported apparel rise.
The stock trades 7.6% below the model fair value of $35.27, yet only 3 of 8 analysts rate it Buy or Strong Buy.
Each chip shows the exact figure and where it comes from. A claim without a source is not published.
Next results
Oct 26, 2026
We update the fair value about 2 days after the results, once the new figures are filed.Add to calendarGoogle
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Valuation
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Where CRI's valuation models land
Price
$32.60
Model fair value
$35.27
Model range
$12.01 to $58.15
Fair value $35.27
Price $32.60
The price sits inside the model range.
Model
Fair value
Upside
Discounted cash flow
Dividend discount
EV/EBITDA comparison
Graham number
P/E comparison
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Quality
INVESTOR
Quality and conviction INVESTOR FEATURE
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