Carpenter Technology Corp (CRS) stock analysis

P/E below its 5-year median

Carpenter Technology's P/E of 26.9 is below its own 5-year median of 40.4.

P/E above the industry

Carpenter Technology's P/E of 26.9 is above the Steel Works, Blast Furnaces, and Rolling and Finishing Mills median of 17.9.

EV/EBITDA below its 5-year median

Carpenter Technology's EV/EBITDA of 17.5 is below its 5-year median of 18.9.

P/B above the industry

Carpenter Technology's price-to-book of 6.92 is above the Steel Works, Blast Furnaces, and Rolling and Finishing Mills median of 1.75.

Trading above fair value

The share price of $304.86 is above our fair value estimate of $301.13.

Margin of safety under 20%

The price is 1.2% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 7.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 110% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing faster than the industry

Revenue grew 10.2% over the last twelve months; the Steel Works, Blast Furnaces, and Rolling and Finishing Mills median is 9.8%.

Guidance raised

Carpenter Technology raised its first quarter of fiscal year 2027 operating income outlook on Jul 30, 2026.

Gross margin improving

Gross margin was 31.2% over the last twelve months, against 27.9% a year earlier.

Return on equity under 15%

Return on equity was 27.8% over the last twelve months and averaged 12.0% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 23.6%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Carpenter Technology's return on equity of 27.8% is above the Steel Works, Blast Furnaces, and Rolling and Finishing Mills median of 3.6%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin above its 5-year average

Net margin was 17.9% over the last twelve months, against a 5-year average of 7.3%.

Net margin above the industry

Carpenter Technology's net margin of 17.9% is above the Steel Works, Blast Furnaces, and Rolling and Finishing Mills median of 4.0%.

Low debt

Debt is 31.7% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 49.9% five years ago to 31.7%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 89.5% of total debt.

Interest well covered

Operating income covers interest expense 22.2 times.

Short-term assets cover short-term debts

Current assets are 3.94 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 8.63; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Carpenter Technology paid dividends worth 0.2% of the share price over the last twelve months.

Yield below Treasuries

The 0.2% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Carpenter Technology yields 0.2%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 7.0% of net income.

Covered by free cash flow

Dividends take 11.8% of free cash flow.