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 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
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.
Each year in the past 5 years AEO had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 8.60%, AEO belongs to the best of the industry, outperforming 80.17% of the companies in the same industry.
Looking at the Return On Equity, with a value of 18.64%, AEO is in the better half of the industry, outperforming 77.69% of the companies in the same industry.
The Return On Invested Capital of AEO (10.97%) is better than 77.69% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AEO is below the industry average of 12.74%.
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.
AEO's Profit Margin has improved in the last couple of years.
AEO has a Operating Margin of 8.35%. This is in the better half of the industry: AEO outperforms 77.69% of its industry peers.
AEO's Operating Margin has improved in the last couple of years.
AEO's Gross Margin of 39.20% is in line compared to the rest of the industry. AEO outperforms 59.50% of its industry peers.
In the last couple of years the Gross Margin of AEO has grown nicely.
| 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
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 less 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 3.39 indicates that AEO is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.39, AEO is doing good in the industry, outperforming 76.03% of the companies in the same industry.
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 | 3.39 |
ROIC/WACC1.12
WACC9.81%
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.
The Current ratio of AEO (1.53) is better than 61.98% of its industry peers.
A Quick Ratio of 0.81 indicates that AEO may have some problems paying its short term obligations.
With a decent Quick ratio value of 0.81, AEO is doing good in the industry, outperforming 65.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.53 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
AEO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.13%, which is quite good.
AEO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.41% yearly.
AEO shows a small growth in Revenue. In the last year, the Revenue has grown by 1.27%.
Measured over the past years, AEO shows a small growth in Revenue. The Revenue has been growing by 4.34% on average per year.
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
Based on estimates for the next years, AEO will show a decrease in Earnings Per Share. The EPS will decrease by -3.10% on average per year.
The Revenue is expected to grow by 0.33% on average over the next years.
EPS Next Y-38.88%
EPS Next 2Y-10.76%
EPS Next 3Y-3.1%
EPS Next 5YN/A
Revenue Next Year-2.55%
Revenue Next 2Y-0.19%
Revenue Next 3Y0.33%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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 6.08, which indicates a rather cheap valuation of AEO.
Compared to the rest of the industry, the Price/Earnings ratio of AEO indicates a rather cheap valuation: AEO is cheaper than 93.39% of the companies listed in the same industry.
AEO is valuated cheaply when we compare the Price/Earnings ratio to 26.03, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 9.95, which indicates a very decent valuation of AEO.
77.69% of the companies in the same industry are more expensive than AEO, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.94, AEO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.08 | ||
| Fwd PE | 9.95 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AEO is valued cheaply inside the industry as 98.35% of the companies are valued more expensively.
AEO's Price/Free Cash Flow ratio is rather cheap when compared to the industry. AEO is cheaper than 85.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.51 | ||
| EV/EBITDA | 2.12 |
4.3 Compensation for Growth
The decent profitability rating of AEO may justify a higher PE ratio.
AEO's earnings are expected to decrease with -3.10% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)1.78
EPS Next 2Y-10.76%
EPS Next 3Y-3.1%
5. Dividend
5.1 Amount
AEO has a Yearly Dividend Yield of 4.17%, which is a nice return.
The stock price of AEO dropped by -22.73% 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 5.10. AEO pays more dividend than 90.91% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, AEO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.17% |
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.
The Dividend Rate of AEO has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP29.28%
EPS Next 2Y-10.76%
EPS Next 3Y-3.1%
10.64
-0.83 (-7.24%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners99.18%
Inst Owner Change-1.03%
Ins Owners6%
Ins Owner Change8.48%
Market Cap1.84B
Analysts66.25
Price Target13.15 (23.59%)
Short Float %11.01%
Short Ratio2.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.17% |
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)-7.94%
PT rev (3m)-35.56%
EPS NQ rev (1m)-240%
EPS NQ rev (3m)-145.25%
EPS NY rev (1m)-26.41%
EPS NY rev (3m)-41.68%
Revenue NQ rev (1m)0.73%
Revenue NQ rev (3m)-6.6%
Revenue NY rev (1m)-0.08%
Revenue NY rev (3m)-5.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.08 | ||
| Fwd PE | 9.95 | ||
| P/S | 0.34 | ||
| P/FCF | 7.51 | ||
| P/OCF | 3.85 | ||
| P/B | 1.04 | ||
| P/tB | 1.22 | ||
| EV/EBITDA | 2.12 |
EPS(TTM)1.75
EY16.45%
EPS(NY)1.07
Fwd EY10.05%
FCF(TTM)1.42
FCFY13.31%
OCF(TTM)2.76
OCFY25.98%
SpS30.89
BVpS10.24
TBVpS8.69
PEG (NY)N/A
PEG (5Y)1.78
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 | 3.39 |
F-Score7
WACC9.81%
ROIC/WACC1.12
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-38.88%
EPS Next 2Y-10.76%
EPS Next 3Y-3.1%
EPS Next 5YN/A
Revenue 1Y (TTM)1.27%
Revenue growth 3Y2.07%
Revenue growth 5Y4.34%
Sales Q2Q%-4.42%
Revenue Next Year-2.55%
Revenue Next 2Y-0.19%
Revenue Next 3Y0.33%
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%