While growth is established for NYSE:ANF, the stock's valuation remains reasonable.

ABERCROMBIE & FITCH CO-CL A (NYSE:ANF) was identified as an affordable growth stock by our stock screener. NYSE:ANF is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

Looking at the Growth

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:ANF, the assigned 7 reflects its growth potential:

• ANF shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 144.79%, which is quite impressive.
• ANF shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 39.75% yearly.
• The Revenue has grown by 19.59% in the past year. This is quite good.
• The Earnings Per Share is expected to grow by 25.74% on average over the next years. This is a very strong growth
• ANF is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.64% yearly.
• The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Assessing Valuation for NYSE:ANF

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:ANF has received a 7 out of 10:

• Based on the Price/Earnings ratio, ANF is valued a bit cheaper than the industry average as 75.63% of the companies are valued more expensively.
• ANF is valuated rather cheaply when we compare the Price/Earnings ratio to 27.35, which is the current average of the S&P500 Index.
• Based on the Price/Forward Earnings ratio, ANF is valued a bit cheaper than 72.27% of the companies in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 23.86. ANF is valued slightly cheaper when compared to this.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ANF indicates a somewhat cheap valuation: ANF is cheaper than 68.91% of the companies listed in the same industry.
• 78.99% of the companies in the same industry are more expensive than ANF, based on the Price/Free Cash Flow ratio.
• ANF's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The excellent profitability rating of ANF may justify a higher PE ratio.
• A more expensive valuation may be justified as ANF's earnings are expected to grow with 25.74% in the coming years.

Understanding NYSE:ANF's Health Score

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:ANF has received a 8 out of 10:

• An Altman-Z score of 6.28 indicates that ANF is not in any danger for bankruptcy at the moment.
• The Altman-Z score of ANF (6.28) is better than 93.28% of its industry peers.
• ANF has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
• ANF's Quick ratio of 0.93 is fine compared to the rest of the industry. ANF outperforms 73.95% of its industry peers.
• ANF does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Understanding NYSE:ANF's Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:ANF, the assigned 8 is a significant indicator of profitability:

• ANF's Return On Assets of 16.45% is amongst the best of the industry. ANF outperforms 94.96% of its industry peers.
• ANF has a better Return On Equity (41.58%) than 92.44% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 26.56%, ANF belongs to the top of the industry, outperforming 94.12% of the companies in the same industry.
• The 3 year average ROIC (12.86%) for ANF is below the current ROIC(26.56%), indicating increased profibility in the last year.
• The Profit Margin of ANF (10.76%) is better than 94.12% of its industry peers.
• ANF's Profit Margin has improved in the last couple of years.
• ANF has a better Operating Margin (14.40%) than 93.28% of its industry peers.
• In the last couple of years the Operating Margin of ANF has grown nicely.
• ANF has a better Gross Margin (64.60%) than 93.28% of its industry peers.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

Our latest full fundamental report of ANF contains the most current fundamental analsysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.