NYSE:AEO appears to be flying under the radar despite its strong fundamentals.

AMERICAN EAGLE OUTFITTERS (NYSE:AEO) has caught the attention of our stock screener as a great value stock. NYSE:AEO excels in profitability, solvency, and liquidity, all while being very reasonably priced. Let's delve into the details.

Exploring NYSE:AEO's Valuation

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:AEO boasts a 8 out of 10:

• AEO is valuated reasonably with a Price/Earnings ratio of 10.96.
• 81.97% of the companies in the same industry are more expensive than AEO, based on the Price/Earnings ratio.
• AEO's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 30.79.
• A Price/Forward Earnings ratio of 10.25 indicates a reasonable valuation of AEO.
• AEO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. AEO is cheaper than 78.69% of the companies in the same industry.
• When comparing the Price/Forward Earnings ratio of AEO to the average of the S&P500 Index (22.21), we can say AEO is valued rather cheaply.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AEO indicates a rather cheap valuation: AEO is cheaper than 86.07% of the companies listed in the same industry.
• AEO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. AEO is cheaper than 75.41% of the companies in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• AEO has a very decent profitability rating, which may justify a higher PE ratio.

Profitability Analysis for NYSE:AEO

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:AEO, the assigned 6 is noteworthy for profitability:

• AEO has a better Return On Assets (7.01%) than 75.41% of its industry peers.
• Looking at the Return On Equity, with a value of 14.64%, AEO is in the better half of the industry, outperforming 72.95% of the companies in the same industry.
• With a decent Return On Invested Capital value of 11.14%, AEO is doing good in the industry, outperforming 79.51% of the companies in the same industry.
• The last Return On Invested Capital (11.14%) for AEO is above the 3 year average (10.41%), which is a sign of increasing profitability.
• AEO has a Profit Margin of 4.58%. This is in the better half of the industry: AEO outperforms 74.59% of its industry peers.
• The Operating Margin of AEO (8.01%) is better than 79.51% of its industry peers.

Health Assessment of NYSE:AEO

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:AEO scores a 7 out of 10:

• AEO has an Altman-Z score of 4.26. This indicates that AEO is financially healthy and has little risk of bankruptcy at the moment.
• The Altman-Z score of AEO (4.26) is better than 81.97% of its industry peers.
• AEO has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
• With a decent Current ratio value of 1.57, AEO is doing good in the industry, outperforming 62.30% of the companies in the same industry.
• AEO has a Quick ratio of 0.74. This is in the better half of the industry: AEO outperforms 63.93% of its industry peers.

A Closer Look at Growth for NYSE:AEO

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:AEO was assigned a score of 5 for growth:

• AEO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 51.24%, which is quite impressive.
• The Earnings Per Share is expected to grow by 11.98% on average over the next years. This is quite good.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

More Decent Value stocks can be found in our Decent Value screener.

Check the latest full fundamental report of AEO for a complete fundamental analysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.