AMERICAN EAGLE OUTFITTERS (AEO)
US02553E1064 - Common Stock
We assign a fundamental rating of 6 out of 10 to AEO. AEO was compared to 126 industry peers in the Specialty Retail industry. AEO is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. AEO has a correct valuation and a medium growth rate.
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
AEO has a Return On Assets of 4.78%. This is in the better half of the industry: AEO outperforms 65.87% of its industry peers.
AEO has a Return On Equity of 9.80%. This is in the better half of the industry: AEO outperforms 65.87% of its industry peers.
AEO has a better Return On Invested Capital (9.63%) than 72.22% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AEO is below the industry average of 13.85%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.78% | ||
| ROE | 9.8% | ||
| ROIC | 9.63% |
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 3.23%, AEO is doing good in the industry, outperforming 65.08% of the companies in the same industry.
In the last couple of years the Profit Margin of AEO has declined.
AEO has a better Operating Margin (6.93%) than 69.05% of its industry peers.
In the last couple of years the Operating Margin of AEO has declined.
AEO has a Gross Margin of 38.48%. This is comparable to the rest of the industry: AEO outperforms 56.35% of its industry peers.
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 | 6.93% | ||
| PM (TTM) | 3.23% | ||
| GM | 38.48% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so AEO is still creating some value.
Compared to 1 year ago, AEO has more shares outstanding
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 4.34. This indicates that AEO is financially healthy and has little risk of bankruptcy at the moment.
AEO has a better Altman-Z score (4.34) than 88.10% 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 | 4.34 |
ROIC/WACC1.03
WACC9.32%
2.3 Liquidity
AEO has a Current Ratio of 1.61. 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 (1.61) is comparable to the rest of the industry.
AEO has a Quick Ratio of 1.61. 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 (0.89) than 63.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.61 | ||
| Quick Ratio | 0.89 |
3. Growth
3.1 Past
AEO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 53.54%, which is quite impressive.
AEO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.53% yearly.
The Revenue has been growing slightly by 5.45% in the past 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)53.54%
EPS 3YN/A
EPS 5Y0.53%
EPS growth Q2Q64.86%
Revenue 1Y (TTM)5.45%
Revenue growth 3Y11.86%
Revenue growth 5Y5.45%
Revenue growth Q2Q12.22%
3.2 Future
Based on estimates for the next years, AEO will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.94% on average per year.
Based on estimates for the next years, AEO will show a small growth in Revenue. The Revenue will grow by 4.14% on average per year.
EPS Next Y14.56%
EPS Next 2Y13.07%
EPS Next 3Y12.94%
EPS Next 5YN/A
Revenue Next Year3.43%
Revenue Next 2Y3.63%
Revenue Next 3Y4.14%
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 accelerating.
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 15.09, which indicates a correct valuation of AEO.
74.60% of the companies in the same industry are more expensive than AEO, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 25.20. AEO is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 13.17, which indicates a correct valuation of AEO.
Based on the Price/Forward Earnings ratio, AEO is valued a bit cheaper than the industry average as 75.40% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.63, AEO is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.09 | ||
| Fwd PE | 13.17 |
4.2 Price Multiples
AEO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. AEO is cheaper than 76.98% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, AEO is valued a bit cheaper than the industry average as 76.98% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.5 | ||
| EV/EBITDA | 5.88 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
AEO's earnings are expected to grow with 12.94% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.04
PEG (5Y)28.22
EPS Next 2Y13.07%
EPS Next 3Y12.94%
5. Dividend
5.1 Amount
AEO has a Yearly Dividend Yield of 2.24%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.51, AEO pays a better dividend. On top of this AEO pays more dividend than 82.54% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, AEO has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
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
49.28% of the earnings are spent on dividend by AEO. This is a bit on the high side, but may be sustainable.
DP49.28%
EPS Next 2Y13.07%
EPS Next 3Y12.94%
AMERICAN EAGLE OUTFITTERS
NYSE:AEO (4/25/2024, 6:35:42 PM)
After market: 22.12 -0.82 (-3.57%)22.94
+0.31 (+1.37%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
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Ins Owner Change
Market Cap4.52B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
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)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.09 | ||
| Fwd PE | 13.17 | ||
| 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)1.04
PEG (5Y)28.22
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.78% | ||
| ROE | 9.8% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 6.93% | ||
| PM (TTM) | 3.23% | ||
| GM | 38.48% | ||
| 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 Turnover1.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.61 | ||
| Quick Ratio | 0.89 | ||
| 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)
Growth
EPS 1Y (TTM)53.54%
EPS 3YN/A
EPS 5Y
EPS growth Q2Q
EPS Next Y14.56%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)5.45%
Revenue growth 3Y11.86%
Revenue growth 5Y
Revenue growth 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