Is Carter's, Inc. overvalued or undervalued?

As of 25 February 2025, the valuation grade for Carter's, Inc. has moved from attractive to very attractive, indicating a significant improvement in its perceived value. The company is currently undervalued, with a P/E ratio of 6, which is notably lower than its peer Urban Outfitters, Inc., which has a P/E ratio of 13.88. Additionally, Carter's EV to EBITDA stands at 4.99, compared to Urban Outfitters' 9.18, further emphasizing its undervaluation.
Carter's Price to Book Value is 1.37, and it boasts a remarkable dividend yield of 517.86%, coupled with a strong ROCE of 20.55% and ROE of 21.72%. These ratios highlight the company's solid financial performance relative to its market price. Despite recent stock performance trailing the S&P 500, the current valuation metrics suggest that Carter's, Inc. presents a compelling investment opportunity at its current price of 30.36.