AMERICAN EAGLE OUTFITTERS (AEO) Stock Fundamental Analysis
NYSE:AEO - US02553E1064 - Common Stock
18 USD
+0.1 (+0.56%)
17.8501 USD
-0.15 (-0.83%)
Taking everything into account, AEO scores 5 out of 10 in our fundamental rating. AEO was compared to 123 industry peers in the Specialty Retail industry. AEO has only an average score on both its financial health and profitability. 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
Looking at the Return On Assets, with a value of 5.22%, AEO is in the better half of the industry, outperforming 69.11% of the companies in the same industry.
AEO has a better Return On Equity (13.34%) than 69.92% of its industry peers.
Looking at the Return On Invested Capital, with a value of 7.29%, AEO is in the better half of the industry, outperforming 66.67% 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 11.99%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.22% | ||
| ROE | 13.34% | ||
| ROIC | 7.29% |
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
The Profit Margin of AEO (3.73%) is better than 72.36% of its industry peers.
In the last couple of years the Profit Margin of AEO has grown nicely.
AEO's Operating Margin of 5.67% is fine compared to the rest of the industry. AEO outperforms 71.54% of its industry peers.
AEO's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 36.92%, AEO perfoms like the industry average, outperforming 52.85% of the companies in the same industry.
AEO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.67% | ||
| PM (TTM) | 3.73% | ||
| GM | 36.92% |
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
Compared to 5 years ago, AEO has more shares outstanding
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 3.45. This indicates that AEO is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of AEO (3.45) is better than 75.61% of its industry peers.
The Debt to FCF ratio of AEO is 0.53, which is an excellent value as it means it would take AEO, only 0.53 years of fcf income to pay off all of its debts.
AEO has a better Debt to FCF ratio (0.53) than 82.93% of its industry peers.
A Debt/Equity ratio of 0.07 indicates that AEO is not too dependend on debt financing.
AEO has a better Debt to Equity ratio (0.07) than 69.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.53 | ||
| Altman-Z | 3.45 |
ROIC/WACC0.77
WACC9.46%
2.3 Liquidity
A Current Ratio of 1.38 indicates that AEO should not have too much problems paying its short term obligations.
With a Current ratio value of 1.38, AEO perfoms like the industry average, outperforming 56.91% of the companies in the same industry.
AEO has a Quick Ratio of 1.38. 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 Quick ratio (0.56) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.38 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
The earnings per share for AEO have decreased strongly by -33.73% in the last year.
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 decrease in Revenue. In the last year, the revenue decreased by -0.95%.
AEO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.34% yearly.
EPS 1Y (TTM)-33.73%
EPS 3Y-7.2%
EPS 5Y3.41%
EPS Q2Q%-185.29%
Revenue 1Y (TTM)-0.95%
Revenue growth 3Y2.07%
Revenue growth 5Y4.34%
Sales Q2Q%-4.74%
3.2 Future
Based on estimates for the next years, AEO will show a very negative growth in Earnings Per Share. The EPS will decrease by -10.10% on average per year.
The Revenue is expected to grow by 0.43% on average over the next years.
EPS Next Y-53.51%
EPS Next 2Y-15.06%
EPS Next 3Y-10.1%
EPS Next 5YN/A
Revenue Next Year-3.05%
Revenue Next 2Y-0.55%
Revenue Next 3Y0.43%
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 decreasing.
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
AEO is valuated correctly with a Price/Earnings ratio of 16.07.
AEO's Price/Earnings ratio is a bit cheaper when compared to the industry. AEO is cheaper than 76.42% of the companies in the same industry.
When comparing the Price/Earnings ratio of AEO to the average of the S&P500 Index (27.07), we can say AEO is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 14.26, the valuation of AEO can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AEO indicates a somewhat cheap valuation: AEO is cheaper than 71.54% of the companies listed in the same industry.
AEO is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.59, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.07 | ||
| Fwd PE | 14.26 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AEO is valued cheaper than 82.93% of the companies in the same industry.
80.49% 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 | 15.09 | ||
| EV/EBITDA | 6.06 |
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 -10.10% in the coming years.
PEG (NY)N/A
PEG (5Y)4.72
EPS Next 2Y-15.06%
EPS Next 3Y-10.1%
5. Dividend
5.1 Amount
AEO has a Yearly Dividend Yield of 2.66%.
AEO's Dividend Yield is rather good when compared to the industry average which is at 5.22. AEO pays more dividend than 86.99% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.46, AEO has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.66% |
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.
AEO has decreased its dividend recently.
Dividend Growth(5Y)-1.76%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
47.54% of the earnings are spent on dividend by AEO. This is a bit on the high side, but may be sustainable.
AEO's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP47.54%
EPS Next 2Y-15.06%
EPS Next 3Y-10.1%
18
+0.1 (+0.56%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners105.77%
Inst Owner Change-4.22%
Ins Owners6.85%
Ins Owner Change3.47%
Market Cap3.12B
Analysts51.11
Price Target12.11 (-32.72%)
Short Float %17.84%
Short Ratio2.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.66% |
Yearly Dividend0.5
Dividend Growth(5Y)-1.76%
DP47.54%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-13.76%
Min EPS beat(2)-33.55%
Max EPS beat(2)6.03%
EPS beat(4)3
Avg EPS beat(4)-6.1%
Min EPS beat(4)-33.55%
Max EPS beat(4)6.03%
EPS beat(8)7
Avg EPS beat(8)9.48%
EPS beat(12)10
Avg EPS beat(12)9.5%
EPS beat(16)12
Avg EPS beat(16)6.73%
Revenue beat(2)0
Avg Revenue beat(2)-1.11%
Min Revenue beat(2)-1.39%
Max Revenue beat(2)-0.83%
Revenue beat(4)0
Avg Revenue beat(4)-1.65%
Min Revenue beat(4)-2.41%
Max Revenue beat(4)-0.83%
Revenue beat(8)1
Avg Revenue beat(8)-1.01%
Revenue beat(12)4
Avg Revenue beat(12)-0.62%
Revenue beat(16)5
Avg Revenue beat(16)-1.12%
PT rev (1m)1.79%
PT rev (3m)1.79%
EPS NQ rev (1m)5.07%
EPS NQ rev (3m)5.42%
EPS NY rev (1m)1.33%
EPS NY rev (3m)-23.93%
Revenue NQ rev (1m)0.48%
Revenue NQ rev (3m)0.56%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)0.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.07 | ||
| Fwd PE | 14.26 | ||
| P/S | 0.59 | ||
| P/FCF | 15.09 | ||
| P/OCF | 6.78 | ||
| P/B | 2.12 | ||
| P/tB | 2.58 | ||
| EV/EBITDA | 6.06 |
EPS(TTM)1.12
EY6.22%
EPS(NY)1.26
Fwd EY7.01%
FCF(TTM)1.19
FCFY6.63%
OCF(TTM)2.66
OCFY14.76%
SpS30.44
BVpS8.51
TBVpS6.97
PEG (NY)N/A
PEG (5Y)4.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.22% | ||
| ROE | 13.34% | ||
| ROCE | 10.03% | ||
| ROIC | 7.29% | ||
| ROICexc | 7.51% | ||
| ROICexgc | 8.28% | ||
| OM | 5.67% | ||
| PM (TTM) | 3.73% | ||
| GM | 36.92% | ||
| FCFM | 3.92% |
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-Score4
Asset Turnover1.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.53 | ||
| Debt/EBITDA | 0.21 | ||
| Cap/Depr | 115.82% | ||
| Cap/Sales | 4.81% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 88.87% | ||
| Profit Quality | 105.05% | ||
| Current Ratio | 1.38 | ||
| Quick Ratio | 0.56 | ||
| Altman-Z | 3.45 |
F-Score4
WACC9.46%
ROIC/WACC0.77
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)-33.73%
EPS 3Y-7.2%
EPS 5Y3.41%
EPS Q2Q%-185.29%
EPS Next Y-53.51%
EPS Next 2Y-15.06%
EPS Next 3Y-10.1%
EPS Next 5YN/A
Revenue 1Y (TTM)-0.95%
Revenue growth 3Y2.07%
Revenue growth 5Y4.34%
Sales Q2Q%-4.74%
Revenue Next Year-3.05%
Revenue Next 2Y-0.55%
Revenue Next 3Y0.43%
Revenue Next 5YN/A
EBIT growth 1Y-24.91%
EBIT growth 3Y-9.64%
EBIT growth 5Y7.23%
EBIT Next Year-9.82%
EBIT Next 3Y4.97%
EBIT Next 5YN/A
FCF growth 1Y-19.77%
FCF growth 3Y53.76%
FCF growth 5Y3.73%
OCF growth 1Y-9.1%
OCF growth 3Y16.22%
OCF growth 5Y2.8%