AMERICAN EAGLE OUTFITTERS (AEO) Stock Fundamental Analysis
NYSE:AEO - New York Stock Exchange, Inc. - US02553E1064 - Common Stock - Currency: USD
AEO gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 121 industry peers in the Specialty Retail industry. AEO scores excellent points on both the profitability and health parts. This is a solid base for a good stock. AEO is valued quite cheap, but it does not seem to be growing. These ratings could make AEO a good candidate for value investing.
1. Profitability
1.1 Basic Checks
In the past year AEO was profitable.
In the past year AEO had a positive cash flow from operations.
Of the past 5 years AEO 4 years were profitable.
AEO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AEO has a better Return On Assets (8.60%) than 81.82% of its industry peers.
With a decent Return On Equity value of 18.64%, AEO is doing good in the industry, outperforming 76.03% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 10.97%, AEO is in the better half of the industry, outperforming 76.86% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AEO is significantly below the industry average of 14.45%.
The 3 year average ROIC (9.43%) for AEO is below the current ROIC(10.97%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.6% | ||
| ROE | 18.64% | ||
| ROIC | 10.97% |
ROA(3y)5.68%
ROA(5y)4.4%
ROE(3y)12.09%
ROE(5y)9.29%
ROIC(3y)9.43%
ROIC(5y)8.68%
1.3 Margins
Looking at the Profit Margin, with a value of 6.18%, AEO belongs to the top of the industry, outperforming 80.17% of the companies in the same industry.
In the last couple of years the Profit Margin of AEO has grown nicely.
AEO has a Operating Margin of 8.35%. This is in the better half of the industry: AEO outperforms 78.51% of its industry peers.
AEO's Operating Margin has improved in the last couple of years.
AEO's Gross Margin of 39.20% is fine compared to the rest of the industry. AEO outperforms 60.33% of its industry peers.
AEO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.35% | ||
| PM (TTM) | 6.18% | ||
| GM | 39.2% |
OM growth 3Y-11.47%
OM growth 5Y2.77%
PM growth 3Y-9.62%
PM growth 5Y6.84%
GM growth 3Y-0.46%
GM growth 5Y2.1%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), AEO is creating some value.
AEO has less shares outstanding than it did 1 year ago.
The number of shares outstanding for AEO has been increased compared to 5 years ago.
AEO has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
AEO has an Altman-Z score of 3.36. This indicates that AEO is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 3.36, AEO is doing good in the industry, outperforming 79.34% of the companies in the same industry.
AEO has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 3.36 |
ROIC/WACC1.21
WACC9.07%
2.3 Liquidity
AEO has a Current Ratio of 1.53. This is a normal value and indicates that AEO is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.53, AEO is in the better half of the industry, outperforming 61.98% of the companies in the same industry.
A Quick Ratio of 0.81 indicates that AEO may have some problems paying its short term obligations.
AEO's Quick ratio of 0.81 is fine compared to the rest of the industry. AEO outperforms 66.94% of its industry peers.
AEO 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.53 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 15.13% over the past year.
Measured over the past 5 years, AEO shows a small growth in Earnings Per Share. The EPS has been growing by 3.41% on average per year.
Looking at the last year, AEO shows a small growth in Revenue. The Revenue has grown by 1.27% in the last year.
The Revenue has been growing slightly by 4.34% on average over the past years.
EPS 1Y (TTM)15.13%
EPS 3Y-7.2%
EPS 5Y3.41%
EPS Q2Q%-11.48%
Revenue 1Y (TTM)1.27%
Revenue growth 3Y2.07%
Revenue growth 5Y4.34%
Sales Q2Q%-4.42%
3.2 Future
AEO is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -5.74% yearly.
AEO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.32% yearly.
EPS Next Y-14.75%
EPS Next 2Y-4.72%
EPS Next 3Y-5.74%
EPS Next 5YN/A
Revenue Next Year-2.47%
Revenue Next 2Y0.2%
Revenue Next 3Y0.32%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 6.14 indicates a rather cheap valuation of AEO.
AEO's Price/Earnings ratio is rather cheap when compared to the industry. AEO is cheaper than 92.56% of the companies in the same industry.
When comparing the Price/Earnings ratio of AEO to the average of the S&P500 Index (28.29), we can say AEO is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 7.20, the valuation of AEO can be described as very cheap.
Based on the Price/Forward Earnings ratio, AEO is valued cheaply inside the industry as 85.95% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.08, AEO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.14 | ||
| Fwd PE | 7.2 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AEO is valued cheaply inside the industry as 95.87% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AEO indicates a rather cheap valuation: AEO is cheaper than 85.12% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.58 | ||
| EV/EBITDA | 1.93 |
4.3 Compensation for Growth
The excellent profitability rating of AEO may justify a higher PE ratio.
AEO's earnings are expected to decrease with -5.74% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)1.8
EPS Next 2Y-4.72%
EPS Next 3Y-5.74%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.68%, AEO is a good candidate for dividend investing.
The stock price of AEO dropped by -33.00% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
AEO's Dividend Yield is rather good when compared to the industry average which is at 5.44. AEO pays more dividend than 90.91% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.57, AEO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.68% |
5.2 History
The dividend of AEO decreases each year by -1.76%.
AEO has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of AEO decreased recently.
Dividend Growth(5Y)-1.76%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
AEO pays out 29.28% of its income as dividend. This is a sustainable payout ratio.
AEO's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP29.28%
EPS Next 2Y-4.72%
EPS Next 3Y-5.74%
10.74
+0.46 (+4.47%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners99.18%
Inst Owner Change-0.05%
Ins Owners6%
Ins Owner Change7.68%
Market Cap1.85B
Analysts66.25
Price Target14.28 (32.96%)
Short Float %9.11%
Short Ratio3.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.68% |
Yearly Dividend0.5
Dividend Growth(5Y)-1.76%
DP29.28%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.22%
Min EPS beat(2)2.42%
Max EPS beat(2)6.03%
EPS beat(4)4
Avg EPS beat(4)7.27%
Min EPS beat(4)0.71%
Max EPS beat(4)19.93%
EPS beat(8)8
Avg EPS beat(8)13.76%
EPS beat(12)10
Avg EPS beat(12)9.24%
EPS beat(16)13
Avg EPS beat(16)9.03%
Revenue beat(2)0
Avg Revenue beat(2)-1.4%
Min Revenue beat(2)-1.97%
Max Revenue beat(2)-0.83%
Revenue beat(4)0
Avg Revenue beat(4)-1.69%
Min Revenue beat(4)-2.41%
Max Revenue beat(4)-0.83%
Revenue beat(8)2
Avg Revenue beat(8)-0.83%
Revenue beat(12)4
Avg Revenue beat(12)-1.21%
Revenue beat(16)6
Avg Revenue beat(16)-1.01%
PT rev (1m)-27.59%
PT rev (3m)-34.27%
EPS NQ rev (1m)-15.87%
EPS NQ rev (3m)-66.79%
EPS NY rev (1m)-18.57%
EPS NY rev (3m)-18.89%
Revenue NQ rev (1m)-0.9%
Revenue NQ rev (3m)-7.44%
Revenue NY rev (1m)-5.61%
Revenue NY rev (3m)-5.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.14 | ||
| Fwd PE | 7.2 | ||
| P/S | 0.35 | ||
| P/FCF | 7.58 | ||
| P/OCF | 3.89 | ||
| P/B | 1.05 | ||
| P/tB | 1.24 | ||
| EV/EBITDA | 1.93 |
EPS(TTM)1.75
EY16.29%
EPS(NY)1.49
Fwd EY13.89%
FCF(TTM)1.42
FCFY13.19%
OCF(TTM)2.76
OCFY25.73%
SpS30.89
BVpS10.24
TBVpS8.69
PEG (NY)N/A
PEG (5Y)1.8
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.6% | ||
| ROE | 18.64% | ||
| ROCE | 15.09% | ||
| ROIC | 10.97% | ||
| ROICexc | 12.49% | ||
| ROICexgc | 13.93% | ||
| OM | 8.35% | ||
| PM (TTM) | 6.18% | ||
| GM | 39.2% | ||
| FCFM | 4.58% |
ROA(3y)5.68%
ROA(5y)4.4%
ROE(3y)12.09%
ROE(5y)9.29%
ROIC(3y)9.43%
ROIC(5y)8.68%
ROICexc(3y)11.35%
ROICexc(5y)11.11%
ROICexgc(3y)13.03%
ROICexgc(5y)13.05%
ROCE(3y)12.97%
ROCE(5y)11.94%
ROICexcg growth 3Y-18.56%
ROICexcg growth 5Y5.17%
ROICexc growth 3Y-16.08%
ROICexc growth 5Y3.41%
OM growth 3Y-11.47%
OM growth 5Y2.77%
PM growth 3Y-9.62%
PM growth 5Y6.84%
GM growth 3Y-0.46%
GM growth 5Y2.1%
F-Score7
Asset Turnover1.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 105.44% | ||
| Cap/Sales | 4.36% | ||
| Interest Coverage | 279.44 | ||
| Cash Conversion | 71.66% | ||
| Profit Quality | 74.17% | ||
| Current Ratio | 1.53 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 3.36 |
F-Score7
WACC9.07%
ROIC/WACC1.21
Cap/Depr(3y)102.71%
Cap/Depr(5y)104.82%
Cap/Sales(3y)4.39%
Cap/Sales(5y)4.26%
Profit Quality(3y)140.43%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)15.13%
EPS 3Y-7.2%
EPS 5Y3.41%
EPS Q2Q%-11.48%
EPS Next Y-14.75%
EPS Next 2Y-4.72%
EPS Next 3Y-5.74%
EPS Next 5YN/A
Revenue 1Y (TTM)1.27%
Revenue growth 3Y2.07%
Revenue growth 5Y4.34%
Sales Q2Q%-4.42%
Revenue Next Year-2.47%
Revenue Next 2Y0.2%
Revenue Next 3Y0.32%
Revenue Next 5YN/A
EBIT growth 1Y22.08%
EBIT growth 3Y-9.64%
EBIT growth 5Y7.23%
EBIT Next Year32.89%
EBIT Next 3Y9%
EBIT Next 5YN/A
FCF growth 1Y-37.88%
FCF growth 3Y53.76%
FCF growth 5Y3.73%
OCF growth 1Y-17.89%
OCF growth 3Y16.22%
OCF growth 5Y2.8%