Is Carpenter Technology Corporation (CRS) Fairly Valued?
Carpenter Technology Corporation valuation review using P/E, fair value, revenue growth, EPS growth, net margin, and TGMCharts chart exhibits as of September 8, 2026.
By TGMCharts Research · Data as of · Updated
Carpenter Technology Corporation does not get a one-metric verdict. The stock trades at 45.18x trailing earnings and the analyst DCF (FMP) reference is $296, so the valuation read depends on whether growth and margins support that price.
The core evidence is the relationship between price, earnings, fair value, and business support. Five-year revenue CAGR is 16.19%, five-year EPS CAGR is 178.15%, and net margin is 16.96%. Those facts decide whether the multiple is defensible or stretched.
- Carpenter Technology Corporation closed at $459 on September 8, 2026.
- Trailing P/E is 45.18x and price-to-sales is 7.67x.
- Analyst DCF (FMP) is $296 with margin of safety at -37.81%.
- Five-year revenue CAGR is 16.19% and five-year EPS CAGR is 178.15%.
- Earnings yield is 2.21% and net margin is 16.96%.
Valuation Setup
The market price, model anchor, growth support, and profitability facts behind the valuation read.
Evaluating the Earnings Multiple and Fundamental Support
Analyzing Carpenter Technology Corporation requires evaluating whether the current market premium is backed by sufficient operational momentum, or if the price has outrun the underlying fundamentals. At the market close on September 8, 2026, the equity was priced at $459, representing a trailing earnings multiple of 45.18x. This valuation level is positioned above the third-party analyst DCF (FMP) fair value estimate of $296, which translates to a negative margin of safety of -37.81%.
To determine if this premium is sustainable, we must look beyond a single ratio. This analysis examines the interaction between the earnings multiple, the price-to-sales ratio, historical growth trajectories, and profit margins. When these metrics align, they form a robust defense of the market's pricing; when they diverge, they signal that investor optimism may be carrying the valuation ahead of actual business performance.
Current compounder snapshot · CRS
Live supporting context; not part of the article's frozen 2026-09-08 evidence snapshot.
- Score
- 20/100
- 10Y CAGR
- 5.6%
- Median YoY
- 8.1%
- YoY volatility
- σ 20.5pp· choppy
- Quarters ≥ 20%
- 10 of 40
- Negative quarters
- 10
- Valuation vs own 10Y history
- P/S 7.7x · 10Y median 1.1x · 97th percentile · as of Sep 4, 2026
How this score is computed
- Quarters at or above 20%: 10 of 40 → 10 of 40 pts
- Steadiness (typical swing 20.5pp) → 10.4 of 25 pts
- Pace (median 8.1% YoY) → 0 of 20 pts
- Latest quarter (12.6% YoY) → 0 of 15 pts
- Score: 20 of 100
Annualized revenue (TTM) · by quarter, last 40
Quarterly YoY revenue growth vs the 20% line
P/S multiple vs its 10Y median
Market Multiples and Owner Yield Context
The market's current appraisal of the business is reflected in a price-to-sales ratio of 7.67x alongside an earnings yield of 2.21%. These figures indicate that investors are paying a significant premium for each dollar of top-line revenue, resulting in a compressed cash yield for equity holders at current prices.
By evaluating the price-to-sales ratio alongside the trailing earnings multiple, we can assess whether the market is pricing in structural improvements in profitability or simply expanding the valuation multiple. This context is essential for understanding the hurdle rate that future earnings must clear to justify the current stock price.
CRS P/E ratio Chart
The trailing earnings multiple is the main valuation exhibit because it connects the market price to reported earnings.
Latest P/E ratio: 45.18x as of September 8, 2026.
A P/E ratio of 45.18x has to be judged against the company's five-year EPS CAGR of 178.15%. If the multiple is high while EPS support is ordinary, the valuation thesis becomes more dependent on investor confidence than on fresh earnings power.
CRS price-to-sales Chart
Price-to-sales gives a second valuation lens when margins and earnings can move around the cycle.
Latest price-to-sales ratio: 7.67x.
Price-to-sales at 7.67x is most useful beside net margin of 16.96%. A richer sales multiple is easier to defend when margin quality is durable rather than temporarily elevated.
Discount Analysis Against Independent DCF Benchmarks
Comparing the market price of $459 to the independent analyst DCF (FMP) model value of $296 highlights a clear valuation gap. The market price sits above this third-party intrinsic value reference, establishing a margin of safety of -37.81%. This negative spread indicates that the stock is trading at a premium to conservative cash flow projections.
While this independent benchmark serves as a useful anchor, it should not be viewed as an absolute judgment. Intrinsic value calculations are highly sensitive to long-term growth and discount rate assumptions. Investors should compare this third-party estimate against a range of operational scenarios to determine if optimistic cash flow projections are realistic.
The valuation at a glance
Each input on its own line: what the stock costs against earnings and sales, the model's fair value and how far price sits from it, and the growth and margins behind the business.
CRS earnings yield Chart
Earnings yield reframes valuation from an owner's-yield perspective rather than a multiple perspective.
Latest earnings yield: 2.21%.
The earnings yield of 2.21% is the counterweight to the P/E ratio. If the yield is thin relative to the quality and growth profile, the valuation case needs more help from future compounding.
Evaluating Top and Bottom Line Growth Trends
To sustain a trailing earnings multiple of 45.18x, the business must demonstrate strong expansion. Over the past five years, the company achieved a revenue compound annual growth rate (CAGR) of 16.19%, while its five-year EPS CAGR reached 178.15%. This indicates that bottom-line profitability has expanded much faster than top-line sales, driven by operating leverage and efficiency gains.
However, relying on historical CAGRs carries risks, as past performance can be skewed by a low starting base or cyclical swings. If bottom-line growth begins to normalize toward the slower pace of top-line revenue expansion, the current earnings multiple will face pressure, requiring a higher volume of sales to support the equity's price.
CRS revenue
Revenue history tests whether the valuation is being supported by real business expansion.
Five-year revenue CAGR: 16.19%. This is endpoint-to-endpoint across the five-year window — a depressed start year can inflate it, so read it against the recent bars.
Revenue growth is the business-expansion evidence behind the valuation read. A five-year revenue CAGR of 16.19% helps show how much of the valuation story is coming from company growth instead of only multiple expansion.
CRS EPS
EPS history checks whether reported earnings are keeping pace with the market multiple.
Five-year EPS CAGR: 178.15%. This is endpoint-to-endpoint across the five-year window — a depressed or negative start year can inflate it, so read it against the recent bars.
A five-year EPS CAGR of 178.15% is the clearest support figure for a P/E-based conclusion. If EPS growth slows while the multiple remains elevated, the article should become more cautious after refresh.
Profitability Margins and Sales Multiple Alignment
The relationship between the price-to-sales ratio of 7.67x and the net profit margin of 16.96% is a key indicator of valuation quality. High sales multiples are easier to defend when a company converts a large portion of its revenue into net income. The current double-digit net margin shows that the company has successfully converted its top-line growth into bottom-line profits.
The critical question is whether these profit margins are structurally sustainable or cyclically elevated. If margins face pressure from rising input costs or shifting product mix, the earnings multiple will contract rapidly, even if total revenue remains stable. This makes margin stability a key factor in supporting the valuation.
CRS net margin
Net margin shows whether the company has enough profitability quality to support its valuation.
Net margin (TTM): 16.96%. The bars below are reported fiscal periods (quarterly where available).
Net margin of 16.96% is a quality signal, not a valuation verdict by itself. It matters because a premium multiple is more defensible when margins are structurally strong and less defensible when margins are peaking.
The Bull and Bear Cases for Current Valuation
The optimistic view is that the company's strong five-year EPS CAGR of 178.15% and solid net margin of 16.96% justify the premium multiple. Proponents would argue that high-quality earnings growth warrants a premium, and that continued operating leverage will bring the trailing multiple down over time.
Conversely, the cautious view points out that the market price of $459 is significantly higher than the analyst DCF (FMP) fair value of $296. With a compressed earnings yield of 2.21%, there is little room for operational error. Any slowdown in growth or compression of margins could lead to a sharp re-rating of the stock.
Bull and bear case
Valuation support
- Five-year revenue CAGR of 16.19% and five-year EPS CAGR of 178.15% support the business case.
- Net margin of 16.96% is the quality check behind the multiple.
Valuation pressure
- A P/E ratio of 45.18x can become demanding if EPS growth slows.
- The analyst-DCF (FMP) margin of safety at -37.81% should change the valuation read if it deteriorates after refresh.
Key Operational Metrics to Monitor
Several key metrics could alter this valuation perspective. A major shift in the analyst DCF (FMP) fair value estimate of $296, or a significant move in the market price toward that level, would require a reassessment. Additionally, any slowdown in the five-year EPS CAGR of 178.15% would signal that the growth story is weakening.
Investors should also closely monitor profit margins. If the net margin falls below the current level of 16.96%, it would indicate that the company's ability to generate high-margin earnings is declining, making the current price-to-sales multiple of 7.67x harder to justify.
Synthesizing Growth, Margins, and Valuation Risks
In conclusion, the valuation of Carpenter Technology Corporation is balanced between strong historical earnings growth and a premium market multiple. While the five-year EPS CAGR of 178.15% and net margin of 16.96% demonstrate solid operational execution, the stock's premium over the analyst DCF (FMP) fair value of $296 suggests that much of this success is already priced in.
For the current valuation to hold, the company must maintain its high profit margins and continue growing its earnings at a pace that justifies its trailing P/E of 45.18x. This analysis is based on historical financial data and does not constitute personalized investment advice or a recommendation to buy or sell the security.
FAQ
Is CRS fairly valued?
Carpenter Technology Corporation trades at 45.18x trailing earnings, while the price gap versus the third-party DCF (FMP) estimate is -37.81%. Read those references alongside five-year revenue CAGR of 16.19% and five-year EPS CAGR of 178.15%; none is a standalone verdict.
What valuation metric matters most for CRS?
This article anchors on P/E, fair value, margin of safety, price-to-sales, earnings yield, revenue growth, and EPS growth. No single metric is treated as a recommendation.
How often should this CRS valuation view refresh?
Numbers here are as of September 8, 2026 — the note's dated snapshot. A note whose figures can no longer be verified against the company's reported data is corrected or unpublished rather than left stale.
What would change our mind
- A material move away from the analyst-DCF (FMP) reference of $296.
- A break in five-year EPS support, currently 178.15%.
- Margin quality drifting away from the latest net margin of 16.96%.
The bottom line
Carpenter Technology Corporation valuation research note from TGMCharts Research, grounded in a dated fundamentals snapshot, chart exhibits, and linked source facts.
Read next: CRS fundamentalsContinue with Carpenter Technology Corporation's full stock page.How we checked this researchShowHide
Data snapshot · By TGMCharts Research.
Every number in this note comes from data we compute and store ourselves from the company's reported figures, plus verbatim excerpts from its SEC filings. When a value isn't available we say so — we never fill gaps with estimates.
Latest filing excerpt
10-K · filed 2026-08-12 · period 2026-06-30 · SEC EDGAR source
- “Net sales outside the United States increased 10 percent from fiscal year 2025 to $1,300.0 million for fiscal year 2026.”
- “Sales to the Medical end-use market decreased 21 percent to $278.4 million from fiscal year 2025.”
- “Industrial and Consumer end-use market sales of $401.8 million increased 12 percent from fiscal year 2025.”
- “Excluding surcharge revenue, sales were 8 percent higher than fiscal year 2025 on 8 percent higher volume.”
Source pages
Exhibit sources
Research trail
Every number, checked
Every numeric or dated claim in this note was checked against our stored company data before publishing — each figure below links to the page it comes from.