AMERICAN EAGLE OUTFITTERS (AEO)
US02553E1064 - Common Stock
We assign a fundamental rating of 6 out of 10 to AEO. AEO was compared to 123 industry peers in the Specialty Retail industry. While AEO has a great health rating, its profitability is only average at the moment. AEO is valued quite cheap, while showing a decent growth score. This is a good combination! With these ratings, AEO could be worth investigating further 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.
AEO had positive earnings in 4 of the past 5 years.
AEO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AEO has a better Return On Assets (7.01%) than 76.86% of its industry peers.
The Return On Equity of AEO (14.64%) is better than 73.55% of its industry peers.
AEO has a better Return On Invested Capital (11.14%) than 78.51% 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 12.26%.
The 3 year average ROIC (10.41%) for AEO is below the current ROIC(11.14%), indicating increased profibility in the last year.
| 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
With a decent Profit Margin value of 4.58%, AEO is doing good in the industry, outperforming 76.86% of the companies in the same industry.
In the last couple of years the Profit Margin of AEO has declined.
Looking at the Operating Margin, with a value of 8.01%, AEO belongs to the top of the industry, outperforming 80.17% of the companies in the same industry.
AEO's Operating Margin has declined in the last couple of years.
The Gross Margin of AEO (39.18%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of AEO has remained more or less at the same level.
| 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
AEO has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it 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 4.08 indicates that AEO is not in any danger for bankruptcy at the moment.
AEO has a better Altman-Z score (4.08) than 82.64% 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 4.08 |
ROIC/WACC1.16
WACC9.59%
2.3 Liquidity
AEO has a Current Ratio of 1.57. This is a normal value and indicates that AEO is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Current ratio value of 1.57, AEO is doing good in the industry, outperforming 62.81% of the companies in the same industry.
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.
The Quick ratio of AEO (0.74) is better than 65.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.57 | ||
| Quick Ratio | 0.74 |
3. Growth
3.1 Past
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.
Measured over the past 5 years, AEO shows a small growth in Earnings Per Share. The EPS has been growing by 0.53% on average per year.
The Revenue has been growing slightly by 7.90% in the past year.
The Revenue has been growing slightly by 5.45% on average over the past years.
EPS 1Y (TTM)51.24%
EPS 3YN/A
EPS 5Y0.53%
EPS Q2Q%56%
Revenue 1Y (TTM)7.9%
Revenue growth 3Y11.86%
Revenue growth 5Y5.45%
Sales Q2Q%7.51%
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 12.28% yearly.
Based on estimates for the next years, AEO will show a small growth in Revenue. The Revenue will grow by 3.42% on average per year.
EPS Next Y19.23%
EPS Next 2Y13.53%
EPS Next 3Y12.28%
EPS Next 5YN/A
Revenue Next Year2.64%
Revenue Next 2Y3.01%
Revenue Next 3Y3.42%
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
The Price/Earnings ratio is 9.41, which indicates a very decent valuation of AEO.
90.08% of the companies in the same industry are more expensive than AEO, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.96, AEO is valued rather cheaply.
A Price/Forward Earnings ratio of 8.79 indicates a reasonable 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 87.60% 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 23.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.41 | ||
| Fwd PE | 8.79 |
4.2 Price Multiples
92.56% of the companies in the same industry are more expensive than AEO, based on the Enterprise Value to EBITDA ratio.
AEO's Price/Free Cash Flow ratio is rather cheap when compared to the industry. AEO is cheaper than 80.99% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.87 | ||
| EV/EBITDA | 4.7 |
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.
AEO's earnings are expected to grow with 12.28% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.49
PEG (5Y)17.6
EPS Next 2Y13.53%
EPS Next 3Y12.28%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.90%, AEO has a reasonable but not impressive dividend return.
In the last 3 months the price of AEO has falen by -22.33%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 3.09, AEO pays a better dividend. On top of this AEO pays more dividend than 90.08% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.23, AEO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
5.2 History
The dividend of AEO decreases each year by -5.09%.
AEO has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-5.09%
Div Incr Years0
Div Non Decr Years0
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 2Y13.53%
EPS Next 3Y12.28%
AMERICAN EAGLE OUTFITTERS
NYSE:AEO (11/21/2024, 8:10:58 PM)
After market: 17.4 +0.18 (+1.05%)17.22
-0.05 (-0.29%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap3.31B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
Dividend Growth(5Y)
DP
Div Incr Years
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Ex-Date
Surprises & Revisions
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PT rev (1m)
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EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
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Revenue NY rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.41 | ||
| Fwd PE | 8.79 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.49
PEG (5Y)17.6
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.01% | ||
| ROE | 14.64% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 8.01% | ||
| PM (TTM) | 4.58% | ||
| GM | 39.18% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.57 | ||
| Quick Ratio | 0.74 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)51.24%
EPS 3YN/A
EPS 5Y
EPS Q2Q%
EPS Next Y19.23%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)7.9%
Revenue growth 3Y11.86%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y