AMERICAN EAGLE OUTFITTERS (AEO) Stock Fundamental Analysis
NYSE:AEO - New York Stock Exchange, Inc. - US02553E1064 - Common Stock - Currency: USD
Taking everything into account, AEO scores 6 out of 10 in our fundamental rating. AEO was compared to 120 industry peers in the Specialty Retail industry. While AEO has a great health rating, its profitability is only average at the moment. AEO may be a bit undervalued, certainly considering the very reasonable score on growth This makes AEO very considerable for value investing!
1. Profitability
1.1 Basic Checks
AEO had positive earnings in the past year.
In the past year AEO had a positive cash flow from operations.
Of the past 5 years AEO 4 years were profitable.
In the past 5 years AEO always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.01%, AEO is in the better half of the industry, outperforming 76.92% of the companies in the same industry.
With a decent Return On Equity value of 14.64%, AEO is doing good in the industry, outperforming 72.65% of the companies in the same industry.
AEO has a better Return On Invested Capital (11.14%) than 76.07% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AEO is in line with the industry average of 12.30%.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.01% | ||
| ROE | 14.64% | ||
| ROIC | 11.14% |
ROA(3y)6.51%
ROA(5y)3.83%
ROE(3y)15.7%
ROE(5y)8.63%
ROIC(3y)10.41%
ROIC(5y)8.01%
1.3 Margins
AEO has a better Profit Margin (4.58%) than 76.07% of its industry peers.
In the last couple of years the Profit Margin of AEO has declined.
With a decent Operating Margin value of 8.01%, AEO is doing good in the industry, outperforming 79.49% of the companies in the same industry.
AEO's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 39.18%, AEO perfoms like the industry average, outperforming 58.12% of the companies in the same industry.
AEO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.01% | ||
| PM (TTM) | 4.58% | ||
| GM | 39.18% |
OM growth 3Y212.88%
OM growth 5Y-3.77%
PM growth 3YN/A
PM growth 5Y-13.02%
GM growth 3Y8%
GM growth 5Y0.86%
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.
Compared to 1 year ago, AEO has more shares outstanding
AEO has more shares outstanding than it did 5 years ago.
There is no outstanding debt for AEO. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
An Altman-Z score of 3.90 indicates that AEO is not in any danger for bankruptcy at the moment.
The Altman-Z score of AEO (3.90) is better than 82.05% of its industry peers.
There is no outstanding debt for AEO. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 3.9 |
ROIC/WACC1.08
WACC10.32%
2.3 Liquidity
A Current Ratio of 1.57 indicates that AEO should not have too much problems paying its short term obligations.
The Current ratio of AEO (1.57) is better than 64.96% of its industry peers.
AEO has a Quick Ratio of 1.57. This is a bad value and indicates that AEO is not financially healthy enough and could expect problems in meeting its short term obligations.
AEO has a better Quick ratio (0.74) than 64.96% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.57 | ||
| Quick Ratio | 0.74 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 42.19% over the past year.
The Earnings Per Share has been growing slightly by 0.53% on average over the past years.
Looking at the last year, AEO shows a small growth in Revenue. The Revenue has grown by 5.45% in the last year.
Measured over the past years, AEO shows a small growth in Revenue. The Revenue has been growing by 5.45% on average per year.
EPS 1Y (TTM)42.19%
EPS 3YN/A
EPS 5Y0.53%
EPS Q2Q%-2.04%
Revenue 1Y (TTM)5.45%
Revenue growth 3Y11.86%
Revenue growth 5Y5.45%
Sales Q2Q%-0.92%
3.2 Future
AEO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.02% yearly.
The Revenue is expected to grow by 2.92% on average over the next years.
EPS Next Y13.2%
EPS Next 2Y9.85%
EPS Next 3Y10.02%
EPS Next 5YN/A
Revenue Next Year1.94%
Revenue Next 2Y2.41%
Revenue Next 3Y2.92%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
With a Price/Earnings ratio of 7.57, the valuation of AEO can be described as very cheap.
Based on the Price/Earnings ratio, AEO is valued cheaper than 94.02% of the companies in the same industry.
AEO's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 29.63.
A Price/Forward Earnings ratio of 7.51 indicates a rather cheap valuation of AEO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AEO indicates a rather cheap valuation: AEO is cheaper than 89.74% of the companies listed in the same industry.
AEO's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.57 | ||
| Fwd PE | 7.51 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AEO is valued cheaper than 95.73% of the companies in the same industry.
83.76% of the companies in the same industry are more expensive than AEO, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.49 | ||
| EV/EBITDA | 3.87 |
4.3 Compensation for Growth
AEO's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of AEO may justify a higher PE ratio.
PEG (NY)0.57
PEG (5Y)14.15
EPS Next 2Y9.85%
EPS Next 3Y10.02%
5. Dividend
5.1 Amount
AEO has a Yearly Dividend Yield of 3.49%.
The stock price of AEO dropped by -21.81% 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 4.01. AEO pays more dividend than 88.89% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, AEO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.49% |
5.2 History
The dividend of AEO decreases each year by -5.09%.
AEO has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of AEO decreased recently.
Dividend Growth(5Y)-5.09%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
37.51% of the earnings are spent on dividend by AEO. This is a low number and sustainable payout ratio.
DP37.51%
EPS Next 2Y9.85%
EPS Next 3Y10.02%
13.77
-0.62 (-4.31%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners105.11%
Inst Owner Change-3.31%
Ins Owners6%
Ins Owner Change-1.02%
Market Cap2.65B
Analysts67.5
Price Target20.4 (48.15%)
Short Float %8.52%
Short Ratio3.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.49% |
Yearly Dividend0.43
Dividend Growth(5Y)-5.09%
DP37.51%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.32%
Min EPS beat(2)0.71%
Max EPS beat(2)19.93%
EPS beat(4)4
Avg EPS beat(4)10.75%
Min EPS beat(4)0.71%
Max EPS beat(4)21.64%
EPS beat(8)8
Avg EPS beat(8)26.2%
EPS beat(12)9
Avg EPS beat(12)10.4%
EPS beat(16)13
Avg EPS beat(16)9.07%
Revenue beat(2)0
Avg Revenue beat(2)-1.99%
Min Revenue beat(2)-2.41%
Max Revenue beat(2)-1.56%
Revenue beat(4)1
Avg Revenue beat(4)-0.83%
Min Revenue beat(4)-2.41%
Max Revenue beat(4)0.86%
Revenue beat(8)4
Avg Revenue beat(8)-0.27%
Revenue beat(12)5
Avg Revenue beat(12)-0.85%
Revenue beat(16)6
Avg Revenue beat(16)-0.92%
PT rev (1m)-6.1%
PT rev (3m)-15.89%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.81%
EPS NY rev (1m)1%
EPS NY rev (3m)-5.05%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.45%
Revenue NY rev (1m)0.43%
Revenue NY rev (3m)-0.68%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.57 | ||
| Fwd PE | 7.51 | ||
| P/S | 0.49 | ||
| P/FCF | 9.49 | ||
| P/OCF | 5.59 | ||
| P/B | 1.56 | ||
| P/tB | 1.86 | ||
| EV/EBITDA | 3.87 |
EPS(TTM)1.82
EY13.22%
EPS(NY)1.83
Fwd EY13.32%
FCF(TTM)1.45
FCFY10.54%
OCF(TTM)2.46
OCFY17.88%
SpS28.19
BVpS8.82
TBVpS7.42
PEG (NY)0.57
PEG (5Y)14.15
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.01% | ||
| ROE | 14.64% | ||
| ROCE | 15.8% | ||
| ROIC | 11.14% | ||
| ROICexc | 11.98% | ||
| ROICexgc | 13.39% | ||
| OM | 8.01% | ||
| PM (TTM) | 4.58% | ||
| GM | 39.18% | ||
| FCFM | 5.15% |
ROA(3y)6.51%
ROA(5y)3.83%
ROE(3y)15.7%
ROE(5y)8.63%
ROIC(3y)10.41%
ROIC(5y)8.01%
ROICexc(3y)13.8%
ROICexc(5y)10.4%
ROICexgc(3y)16.47%
ROICexgc(5y)12.05%
ROCE(3y)14.77%
ROCE(5y)11.36%
ROICexcg growth 3Y243.61%
ROICexcg growth 5Y-11.61%
ROICexc growth 3Y232.06%
ROICexc growth 5Y-13.01%
OM growth 3Y212.88%
OM growth 5Y-3.77%
PM growth 3YN/A
PM growth 5Y-13.02%
GM growth 3Y8%
GM growth 5Y0.86%
F-Score8
Asset Turnover1.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 84.58% | ||
| Cap/Sales | 3.59% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 71.27% | ||
| Profit Quality | 112.36% | ||
| Current Ratio | 1.57 | ||
| Quick Ratio | 0.74 | ||
| Altman-Z | 3.9 |
F-Score8
WACC10.32%
ROIC/WACC1.08
Cap/Depr(3y)113.61%
Cap/Depr(5y)107.11%
Cap/Sales(3y)4.51%
Cap/Sales(5y)4.37%
Profit Quality(3y)121.04%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)42.19%
EPS 3YN/A
EPS 5Y0.53%
EPS Q2Q%-2.04%
EPS Next Y13.2%
EPS Next 2Y9.85%
EPS Next 3Y10.02%
EPS Next 5YN/A
Revenue 1Y (TTM)5.45%
Revenue growth 3Y11.86%
Revenue growth 5Y5.45%
Sales Q2Q%-0.92%
Revenue Next Year1.94%
Revenue Next 2Y2.41%
Revenue Next 3Y2.92%
Revenue Next 5YN/A
EBIT growth 1Y34.48%
EBIT growth 3Y249.99%
EBIT growth 5Y1.47%
EBIT Next Year79.85%
EBIT Next 3Y26.27%
EBIT Next 5YN/A
FCF growth 1Y240.75%
FCF growth 3Y74.83%
FCF growth 5Y8.06%
OCF growth 1Y518.24%
OCF growth 3Y42.07%
OCF growth 5Y4.93%