AMERICAN EAGLE OUTFITTERS (AEO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AEO - US02553E1064 - Common Stock
27.84 USD
+0.3 (+1.09%)
27.91 USD
+0.07 (+0.25%)
AEO gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 123 industry peers in the Specialty Retail industry. Both the profitability and the financial health of AEO get a neutral evaluation. Nothing too spectacular is happening here. AEO is valued correctly, but it does not seem to be growing.
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.
AEO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 4.97%, AEO is doing good in the industry, outperforming 68.55% of the companies in the same industry.
Looking at the Return On Equity, with a value of 12.82%, AEO is in the better half of the industry, outperforming 70.97% of the companies in the same industry.
With a decent Return On Invested Capital value of 6.32%, AEO is doing good in the industry, outperforming 61.29% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AEO is below the industry average of 12.16%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.97% | ||
| ROE | 12.82% | ||
| ROIC | 6.32% |
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
AEO has a Profit Margin of 3.90%. This is in the better half of the industry: AEO outperforms 72.58% of its industry peers.
AEO's Profit Margin has improved in the last couple of years.
AEO has a Operating Margin of 5.43%. This is in the better half of the industry: AEO outperforms 69.35% of its industry peers.
In the last couple of years the Operating Margin of AEO has grown nicely.
AEO has a Gross Margin of 36.95%. This is comparable to the rest of the industry: AEO outperforms 52.42% of its industry peers.
AEO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.43% | ||
| PM (TTM) | 3.9% | ||
| GM | 36.95% |
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 below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, AEO has less shares outstanding
The number of shares outstanding for AEO has been increased compared to 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 3.59 indicates that AEO is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.59, AEO belongs to the top of the industry, outperforming 81.45% of the companies in the same industry.
AEO has a debt to FCF ratio of 1.35. This is a very positive value and a sign of high solvency as it would only need 1.35 years to pay back of all of its debts.
AEO's Debt to FCF ratio of 1.35 is fine compared to the rest of the industry. AEO outperforms 78.23% of its industry peers.
AEO has a Debt/Equity ratio of 0.13. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.13, AEO is in the better half of the industry, outperforming 67.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 1.35 | ||
| Altman-Z | 3.59 |
ROIC/WACC0.66
WACC9.6%
2.3 Liquidity
A Current Ratio of 1.63 indicates that AEO should not have too much problems paying its short term obligations.
The Current ratio of AEO (1.63) is better than 66.94% of its industry peers.
A Quick Ratio of 0.59 indicates that AEO may have some problems paying its short term obligations.
AEO has a Quick ratio (0.59) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.63 | ||
| Quick Ratio | 0.59 |
3. Growth
3.1 Past
AEO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -32.42%.
AEO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.41% yearly.
The Revenue has decreased by -1.15% in the past year.
The Revenue has been growing slightly by 4.34% on average over the past years.
EPS 1Y (TTM)-32.42%
EPS 3Y-7.2%
EPS 5Y3.41%
EPS Q2Q%10.42%
Revenue 1Y (TTM)-1.15%
Revenue growth 3Y2.07%
Revenue growth 5Y4.34%
Sales Q2Q%5.71%
3.2 Future
AEO is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -2.04% yearly.
Based on estimates for the next years, AEO will show a small growth in Revenue. The Revenue will grow by 1.77% on average per year.
EPS Next Y-31.89%
EPS Next 2Y-8.95%
EPS Next 3Y-2.04%
EPS Next 5YN/A
Revenue Next Year0.32%
Revenue Next 2Y1.04%
Revenue Next 3Y1.77%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 22.63, AEO is valued on the expensive side.
Based on the Price/Earnings ratio, AEO is valued a bit cheaper than the industry average as 70.16% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.38, AEO is valued at the same level.
AEO is valuated rather expensively with a Price/Forward Earnings ratio of 19.19.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AEO indicates a somewhat cheap valuation: AEO is cheaper than 64.52% of the companies listed in the same industry.
AEO's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.63 | ||
| Fwd PE | 19.19 |
4.2 Price Multiples
AEO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. AEO is cheaper than 65.32% of the companies in the same industry.
61.29% 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 | 30.35 | ||
| EV/EBITDA | 9.35 |
4.3 Compensation for Growth
AEO has a very decent profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as AEO's earnings are expected to decrease with -2.04% in the coming years.
PEG (NY)N/A
PEG (5Y)6.64
EPS Next 2Y-8.95%
EPS Next 3Y-2.04%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.82%, AEO has a reasonable but not impressive dividend return.
AEO's Dividend Yield is a higher than the industry average which is at 1.98.
AEO's Dividend Yield is comparable with the S&P500 average which is at 1.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.82% |
5.2 History
The dividend of AEO decreases each year by -1.76%.
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)-1.76%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
AEO pays out 42.14% of its income as dividend. This is a bit on the high side, but may be sustainable.
The Dividend Rate of AEO has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP42.14%
EPS Next 2Y-8.95%
EPS Next 3Y-2.04%
27.84
+0.3 (+1.09%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners102.51%
Inst Owner Change2.24%
Ins Owners6.95%
Ins Owner Change-4.48%
Market Cap4.71B
Revenue(TTM)5.34B
Net Income(TTM)208.42M
Analysts51.58
Price Target23.33 (-16.2%)
Short Float %13.96%
Short Ratio2.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.82% |
Yearly Dividend0.5
Dividend Growth(5Y)-1.76%
DP42.14%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)67.76%
Min EPS beat(2)20.58%
Max EPS beat(2)114.93%
EPS beat(4)3
Avg EPS beat(4)27.51%
Min EPS beat(4)-31.49%
Max EPS beat(4)114.93%
EPS beat(8)7
Avg EPS beat(8)19.34%
EPS beat(12)11
Avg EPS beat(12)19.61%
EPS beat(16)12
Avg EPS beat(16)13.35%
Revenue beat(2)2
Avg Revenue beat(2)2.31%
Min Revenue beat(2)1.92%
Max Revenue beat(2)2.69%
Revenue beat(4)2
Avg Revenue beat(4)0.6%
Min Revenue beat(4)-1.39%
Max Revenue beat(4)2.69%
Revenue beat(8)2
Avg Revenue beat(8)-0.47%
Revenue beat(12)5
Avg Revenue beat(12)-0.28%
Revenue beat(16)6
Avg Revenue beat(16)-0.79%
PT rev (1m)42.47%
PT rev (3m)48.18%
EPS NQ rev (1m)19.87%
EPS NQ rev (3m)20.2%
EPS NY rev (1m)4.99%
EPS NY rev (3m)46.49%
Revenue NQ rev (1m)5.86%
Revenue NQ rev (3m)6.63%
Revenue NY rev (1m)0.19%
Revenue NY rev (3m)0.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.63 | ||
| Fwd PE | 19.19 | ||
| P/S | 0.88 | ||
| P/FCF | 30.35 | ||
| P/OCF | 11.12 | ||
| P/B | 2.9 | ||
| P/tB | 3.47 | ||
| EV/EBITDA | 9.35 |
EPS(TTM)1.23
EY4.42%
EPS(NY)1.45
Fwd EY5.21%
FCF(TTM)0.92
FCFY3.3%
OCF(TTM)2.5
OCFY8.99%
SpS31.54
BVpS9.6
TBVpS8.03
PEG (NY)N/A
PEG (5Y)6.64
Graham Number16.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.97% | ||
| ROE | 12.82% | ||
| ROCE | 8.69% | ||
| ROIC | 6.32% | ||
| ROICexc | 6.54% | ||
| ROICexgc | 7.12% | ||
| OM | 5.43% | ||
| PM (TTM) | 3.9% | ||
| GM | 36.95% | ||
| FCFM | 2.91% |
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%
ROICexgc growth 3Y-18.56%
ROICexgc 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-Score5
Asset Turnover1.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 1.35 | ||
| Debt/EBITDA | 0.41 | ||
| Cap/Depr | 119.7% | ||
| Cap/Sales | 5.03% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 82.45% | ||
| Profit Quality | 74.54% | ||
| Current Ratio | 1.63 | ||
| Quick Ratio | 0.59 | ||
| Altman-Z | 3.59 |
F-Score5
WACC9.6%
ROIC/WACC0.66
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)-32.42%
EPS 3Y-7.2%
EPS 5Y3.41%
EPS Q2Q%10.42%
EPS Next Y-31.89%
EPS Next 2Y-8.95%
EPS Next 3Y-2.04%
EPS Next 5YN/A
Revenue 1Y (TTM)-1.15%
Revenue growth 3Y2.07%
Revenue growth 5Y4.34%
Sales Q2Q%5.71%
Revenue Next Year0.32%
Revenue Next 2Y1.04%
Revenue Next 3Y1.77%
Revenue Next 5YN/A
EBIT growth 1Y-32.94%
EBIT growth 3Y-9.64%
EBIT growth 5Y7.23%
EBIT Next Year17.31%
EBIT Next 3Y14.63%
EBIT Next 5YN/A
FCF growth 1Y-72.83%
FCF growth 3Y53.76%
FCF growth 5Y3.73%
OCF growth 1Y-45.45%
OCF growth 3Y16.22%
OCF growth 5Y2.8%
AMERICAN EAGLE OUTFITTERS / AEO FAQ
What is the ChartMill fundamental rating of AMERICAN EAGLE OUTFITTERS (AEO) stock?
ChartMill assigns a fundamental rating of 5 / 10 to AEO.
Can you provide the valuation status for AMERICAN EAGLE OUTFITTERS?
ChartMill assigns a valuation rating of 4 / 10 to AMERICAN EAGLE OUTFITTERS (AEO). This can be considered as Fairly Valued.
How profitable is AMERICAN EAGLE OUTFITTERS (AEO) stock?
AMERICAN EAGLE OUTFITTERS (AEO) has a profitability rating of 6 / 10.
Can you provide the financial health for AEO stock?
The financial health rating of AMERICAN EAGLE OUTFITTERS (AEO) is 6 / 10.
Can you provide the dividend sustainability for AEO stock?
The dividend rating of AMERICAN EAGLE OUTFITTERS (AEO) is 4 / 10 and the dividend payout ratio is 42.14%.