Breaking Down Carpenter Technology Corporation (CRS) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments? Have you ever wondered if Carpenter Technology Corporation (CRS) is a financially sound company? With a 163.8% return over the past year, it's definitely catching eyes. But beyond the impressive market performance, what do the numbers reveal about its long-term financial health? In fiscal year 2024, the company reported a revenue of $2.87 Billion USD and operating income between $500 million and $520 million for fiscal year 2025. Let's dive into the key insights that can help you make informed decisions.

Carpenter Technology Corporation (CRS) Revenue Analysis

Carpenter Technology Corporation, a well-established company specializing in advanced manufacturing, has built a strong reputation for producing specialty alloys that cater to the rigorous demands of industries such as aerospace, defense, medical, and energy. Headquartered in Pennsylvania, Carpenter Technology excels in crafting materials to precise specifications, acknowledging that the reliability of spacecraft, jet engines, and medical implants often depends on the quality of the alloys used. The company's revenue streams are primarily derived from the customization and production of alloys for a global clientele requiring exacting specifications.

Based on the financial report for December 31, 2024, Carpenter Technology Corp's revenue amounted to $2.9B USD.

Carpenter Technology's revenue for the twelve months ending December 31, 2024, was $2.878B, a 5.64% increase year-over-year.

Carpenter Technology annual revenue for 2024 was $2.76B, an 8.21% increase from 2023.

Here is a breakdown of Carpenter Technology Corporation's revenue streams:

• Products: Alloy customization and production.
• Services: Design and application consulting.
• Regions: Global client base.

Carpenter Technology Corp's Revenue CAGR (Compound Annual Growth Rate) over 10 years is 2%.

The average annual revenue growth rates for Carpenter Technology Corp have been:

• 23% over the past three years
• 4% over the past five years
• 2% over the past ten years

Over the last year, the revenue growth was 6%.

A breakdown by business segments shows the following contributions to Carpenter Technology Corp's total revenue of $2.8B USD:

For more insights into Carpenter Technology Corporation's financial health, you can refer to: Breaking Down Carpenter Technology Corporation (CRS) Financial Health: Key Insights for Investors

Carpenter Technology Corporation (CRS) Profitability Metrics

Analyzing Carpenter Technology Corporation's (CRS) profitability involves examining several key metrics to gauge its financial health and operational efficiency. These metrics include gross profit, operating profit, and net profit margins, which provide insights into the company's ability to generate earnings from its revenue.

Here's an overview of Carpenter Technology's profitability, focusing on recent financial data:

• Revenue: In 2024, Carpenter Technology's revenue was $2.76 billion, reflecting an 8.21% increase compared to the previous year's $2.55 billion.
• Gross Profit: The company's gross profit for the fiscal year ending in June 2024 was $584 million.
• Operating Income: For the twelve months ending December 31, 2024, Carpenter Technology's operating income was $0.417 billion, a 72.95% increase year-over-year. The annual operating income for 2024 was $0.323 billion, a 142.75% increase from 2023.
• Net Income: Earnings for 2024 were $186.20 million, a substantial increase of 232.50%.

Here's a closer look at the profitability margins:

• Gross Profit Margin:
  • The gross profit margin for the quarter ending December 31, 2024, was 26.22%.
  • The gross profit for the same quarter was $177.5 million.
• Operating Margin:
  • The operating income margin for the trailing twelve months (TTM) ending December 31, 2024, was 15.83%, an 80.25% change year-over-year.
• EBITDA Margin:
  • The EBITDA margin for the TTM ending December 31, 2024, was 18.36%, a 36.47% increase year-over-year.
• Net Profit Margin:
  • The net profit margin for the fiscal year ending June 2024 showed a significant increase, with net income growing by 230.67% to $187 million.

To provide a clearer picture, here's a table summarizing Carpenter Technology's key profitability figures for fiscal year 2024:

Carpenter Technology's financial performance in fiscal year 2024 demonstrates substantial growth in revenue, gross profit, operating income, and net income. The profitability margins, including gross profit margin, operating margin, EBITDA margin, and net profit margin, all reflect positive trends, indicating improved operational efficiency and earnings generation. These improvements suggest that Carpenter Technology has been effective in managing its costs and capitalizing on market opportunities.

For more detailed insights, you can explore Breaking Down Carpenter Technology Corporation (CRS) Financial Health: Key Insights for Investors.

Carpenter Technology Corporation (CRS) Debt vs. Equity Structure

Understanding how Carpenter Technology Corporation (CRS) manages its debt and equity is crucial for assessing its financial health and growth potential. This involves looking at the company's debt levels, its debt-to-equity ratio, and any recent financing activities.

Carpenter Technology Corporation's (CRS) financial structure includes a mix of debt and equity. As of the third quarter of fiscal year 2024, the company reported:

• Total liabilities of $738.8 million
• Total equity of $1.57 billion

These figures provide a snapshot of how the company is financed, with debt representing a portion of the capital used to fund its operations and growth.

The debt-to-equity ratio is a key metric for evaluating a company's financial leverage. It indicates the proportion of debt and equity used to finance a company's assets. To calculate this ratio for Carpenter Technology Corporation (CRS) using the latest data:

Debt-to-Equity Ratio = Total Liabilities / Total Equity

Using the data from the third quarter of fiscal year 2024:

Debt-to-Equity Ratio = $738.8 million / $1.57 billion ≈ 0.47

A debt-to-equity ratio of approximately 0.47 suggests that Carpenter Technology Corporation (CRS) has a balanced capital structure, with a moderate level of debt relative to its equity. This indicates that the company relies more on equity than debt to finance its assets, which can be seen as a sign of financial stability.

Recent activities, such as debt refinancing or new credit agreements, can significantly impact a company's financial structure. For instance, Carpenter Technology Corporation (CRS) entered into a new $600 million revolving credit facility in December 2023, which matures in December 2028. This facility replaced the previous $300 million revolving credit agreement. Such actions can provide the company with greater financial flexibility and potentially lower borrowing costs.

Balancing debt and equity is a strategic decision. While debt can provide leverage and potentially increase returns on equity, it also introduces financial risk. Equity, on the other hand, provides a stable capital base but may dilute ownership. Carpenter Technology Corporation (CRS) seems to maintain a balanced approach, utilizing both debt and equity to fund its operations and growth initiatives.

More insights about Carpenter Technology Corporation (CRS) can be found here: Mission Statement, Vision, & Core Values of Carpenter Technology Corporation (CRS).

Carpenter Technology Corporation (CRS) Liquidity and Solvency

Understanding Carpenter Technology Corporation's (CRS) financial health requires a close examination of its liquidity and solvency. Liquidity refers to the company's ability to meet its short-term obligations, while solvency assesses its ability to meet long-term obligations. These metrics provide insights into the company's financial stability and risk profile.

Assessing Carpenter Technology Corporation's Liquidity:

Analyzing Carpenter Technology Corporation’s liquidity involves key financial ratios and metrics that reflect its ability to cover short-term liabilities with its short-term assets.

• Current and Quick Ratios: These ratios measure a company's ability to pay off its current liabilities with its current assets. The current ratio includes all current assets, while the quick ratio excludes inventory, which is often less liquid. For fiscal year 2024, Carpenter Technology Corporation reported a current ratio of 2.5, indicating a strong liquidity position.
• Analysis of Working Capital Trends: Working capital, calculated as current assets minus current liabilities, indicates the company's operational liquidity. Consistent positive working capital suggests the company efficiently manages its short-term assets and liabilities.
• Cash Flow Statements Overview: The cash flow statement is crucial for understanding the movement of cash both into and out of the company. It is broken down into three main activities:

• Operating Activities: This section shows the cash generated from the company's core business operations.
• Investing Activities: This reflects cash used for investments in assets, such as property, plant, and equipment.
• Financing Activities: This includes cash flow related to debt, equity, and dividends.

Carpenter Technology Corporation’s cash flow from operating activities for fiscal year 2024 shows a net cash provided by operating activities of $343.8 million, which is a significant indicator of its financial health. The company’s strategic investments and financing decisions also play a crucial role in maintaining liquidity.

Potential Liquidity Concerns or Strengths:

Carpenter Technology Corporation demonstrates strong liquidity, supported by healthy current and quick ratios and positive cash flow from operating activities. Prudent management of working capital and strategic financing activities further solidify its ability to meet short-term obligations.

For additional insights into Carpenter Technology Corporation's values, review Mission Statement, Vision, & Core Values of Carpenter Technology Corporation (CRS).

Carpenter Technology Corporation (CRS) Valuation Analysis

Determining whether Carpenter Technology Corporation (CRS) is overvalued or undervalued involves examining several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, as well as stock price trends, dividend yield, payout ratios (if applicable), and analyst consensus.

As of April 2025, here’s a snapshot of these indicators:

• Price-to-Earnings (P/E) Ratio: As of March 31, 2024, the trailing twelve months (TTM) P/E ratio for Carpenter Technology Corporation is 23.72.
• Price-to-Book (P/B) Ratio: The most recent P/B ratio is 2.37, as of March 31, 2024.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: According to the information from February 2024, the EV/EBITDA ratio is 13.41.

Stock Price Trends: Over the past year, Carpenter Technology Corporation has shown significant stock price appreciation. For instance, the stock price has increased from approximately $44.54 on April 26, 2024, to $91.23 as of April 18, 2025. This represents a substantial increase, reflecting positive investor sentiment and market confidence in the company's performance.

Dividend Yield and Payout Ratios: As of December 14, 2023, Carpenter Technology (CRS) announced the reinstatement of its quarterly dividend at $0.20 per share. The annual dividend payout is $0.80 per share. The dividend yield, based on a stock price of $74.17, is approximately 1.08%.

Analyst Consensus: The consensus among analysts varies. According to one source, the consensus estimate was to hold the stock. The target prices from analysts range from a high of $85.00 to a low of $67.00, with an average target price of $77.67. Another analysis reiterates a 'Hold' rating, emphasizing stable earnings and financial health.

Here is a table summarizing the analyst ratings and price targets for Carpenter Technology Corporation:

Considering these factors, assessing whether Carpenter Technology Corporation is overvalued or undervalued requires a holistic view. The strong stock price appreciation and reinstatement of dividends suggest positive market perception. However, moderate P/E and P/B ratios, coupled with varied analyst opinions, indicate that investors should conduct thorough due diligence and consider their investment horizon and risk tolerance.

Read more about Carpenter Technology Corporation (CRS) financial health: Breaking Down Carpenter Technology Corporation (CRS) Financial Health: Key Insights for Investors

Carpenter Technology Corporation (CRS) Risk Factors

Carpenter Technology Corporation (CRS) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, market conditions, and specific operational and strategic challenges highlighted in recent financial reports.

Here's a breakdown of key risk areas:

• Industry Competition: The specialty alloys market is highly competitive. Carpenter Technology faces pressure from both domestic and international competitors, some of whom may have greater financial resources or lower production costs. Increased competition could lead to price erosion, reduced sales volumes, and decreased profitability.
• Regulatory Changes: Changes in environmental regulations, trade policies, or government spending could adversely affect Carpenter Technology's operations and financial results. For example, new tariffs or trade restrictions could increase the cost of raw materials or limit access to key markets.
• Market Conditions: Fluctuations in the aerospace, energy, and automotive industries—all major consumers of Carpenter Technology's products—can impact demand and pricing. Economic downturns or industry-specific slowdowns could lead to reduced sales and lower earnings.

Operational, financial, and strategic risks are detailed in Carpenter Technology's filings. Here are some notable areas:

• Raw Material Costs: The cost of raw materials, such as nickel, cobalt, and titanium, can fluctuate significantly. Increases in these costs could negatively impact Carpenter Technology's gross margins, especially if the company is unable to pass these costs on to customers through price increases.
• Operational Execution: Maintaining efficient manufacturing processes and managing production costs are critical. Unexpected equipment failures, production delays, or quality control issues could disrupt operations and increase expenses.
• Debt and Liquidity: Carpenter Technology's level of debt and access to liquidity are important factors in its financial health. The company needs to manage its debt obligations effectively and maintain sufficient cash flow to fund operations and investments.

Mitigation strategies and plans to address these risks include:

• Diversification: Expanding into new markets and applications can reduce reliance on any single industry or customer. This diversification strategy helps to cushion the impact of downturns in specific sectors.
• Operational Improvements: Investing in technology and process improvements can enhance efficiency, reduce costs, and improve product quality. These efforts can help to maintain competitiveness and protect profit margins.
• Financial Management: Prudent financial management, including managing debt levels and maintaining adequate liquidity, is essential. The company may use hedging strategies to mitigate the impact of raw material price fluctuations.

For further insights into Carpenter Technology Corporation's strategic direction, explore Mission Statement, Vision, & Core Values of Carpenter Technology Corporation (CRS).

Carpenter Technology Corporation (CRS) Growth Opportunities

Carpenter Technology Corporation's future growth prospects are anchored in several key drivers, including product innovations, strategic market expansions, and potential acquisitions. These elements collectively aim to bolster the company's revenue and earnings in the coming years.

A critical aspect of Carpenter Technology's growth strategy involves continuous product innovation. The company consistently invests in research and development to create advanced materials and solutions tailored to meet the evolving needs of its customers. For example, their focus on developing high-performance alloys for aerospace, medical, and energy applications not only addresses current market demands but also anticipates future technological advancements. These innovations often lead to increased market share and higher profit margins.

Market expansion is another vital component of Carpenter Technology's growth strategy. This includes:

• Geographic Expansion: Identifying and penetrating new geographic markets, particularly in emerging economies with growing demand for specialized materials.
• Sector Diversification: Expanding the company's presence in diverse sectors such as medical, automotive, and electronics, reducing dependence on any single industry.

Strategic initiatives and partnerships are also crucial for Carpenter Technology's growth. Collaborations with other companies, research institutions, and government agencies can provide access to new technologies, markets, and resources. These partnerships can accelerate product development, reduce costs, and enhance the company's competitive positioning.

Carpenter Technology possesses several competitive advantages that position it favorably for future growth:

• Technological Expertise: The company's deep knowledge and experience in developing and manufacturing specialty alloys provide a significant competitive edge.
• Customer Relationships: Strong, long-standing relationships with key customers in various industries ensure a steady stream of business and opportunities for collaboration.
• Operational Efficiency: Continuous improvements in manufacturing processes and supply chain management enhance efficiency and reduce costs.

Here is a summary of Carpenter Technology Corporation's financial performance:

To delve deeper into Carpenter Technology Corporation's core values and strategic vision, explore: Mission Statement, Vision, & Core Values of Carpenter Technology Corporation (CRS).