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 5 out of 10 in our fundamental rating. AEO was compared to 121 industry peers in the Specialty Retail industry. AEO has an average financial health and profitability rating. 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.
AEO had a positive operating cash flow in the past year.
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
Looking at the Return On Assets, with a value of 5.22%, AEO is in the better half of the industry, outperforming 69.42% of the companies in the same industry.
AEO has a better Return On Equity (13.34%) than 71.07% of its industry peers.
The Return On Invested Capital of AEO (7.29%) is better than 66.94% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AEO is below the industry average of 13.07%.
| 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
With a decent Profit Margin value of 3.73%, AEO is doing good in the industry, outperforming 71.90% of the companies in the same industry.
AEO's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 5.67%, AEO is doing good in the industry, outperforming 71.90% of the companies in the same industry.
In the last couple of years the Operating Margin of AEO has grown nicely.
AEO has a Gross Margin of 36.92%. This is comparable to the rest of the industry: AEO outperforms 52.89% of its industry peers.
In the last couple of years the Gross Margin of AEO has grown nicely.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AEO is destroying value.
The number of shares outstanding for AEO has been reduced compared to 1 year ago.
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 3.08. This indicates that AEO is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.08, AEO is in the better half of the industry, outperforming 68.59% of the companies in the same industry.
AEO has a debt to FCF ratio of 0.53. This is a very positive value and a sign of high solvency as it would only need 0.53 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.53, AEO belongs to the top of the industry, outperforming 84.30% of the companies in the same industry.
A Debt/Equity ratio of 0.07 indicates that AEO is not too dependend on debt financing.
The Debt to Equity ratio of AEO (0.07) is better than 71.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.53 | ||
| Altman-Z | 3.08 |
ROIC/WACC0.76
WACC9.55%
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 52.07% 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.
The Quick ratio of AEO (0.56) 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
AEO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -33.73%.
Measured over the past 5 years, AEO shows a small growth in Earnings Per Share. The EPS has been growing by 3.41% on average per year.
AEO shows a decrease in Revenue. In the last year, the revenue decreased by -0.95%.
The Revenue has been growing slightly by 4.34% on average over the past years.
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 decrease in Earnings Per Share. The EPS will decrease by -3.92% on average per year.
Based on estimates for the next years, AEO will show a small growth in Revenue. The Revenue will grow by 0.12% on average per year.
EPS Next Y-54.12%
EPS Next 2Y-16.26%
EPS Next 3Y-3.92%
EPS Next 5YN/A
Revenue Next Year-3.18%
Revenue Next 2Y-0.64%
Revenue Next 3Y0.12%
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 8.84, which indicates a very decent valuation of AEO.
Based on the Price/Earnings ratio, AEO is valued cheaply inside the industry as 89.26% of the companies are valued more expensively.
AEO's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.30.
A Price/Forward Earnings ratio of 8.07 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 89.26% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. AEO is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.84 | ||
| Fwd PE | 8.07 |
4.2 Price Multiples
AEO's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. AEO is cheaper than 93.39% of the companies in the same industry.
AEO's Price/Free Cash Flow ratio is rather cheap when compared to the industry. AEO is cheaper than 88.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.3 | ||
| EV/EBITDA | 3.35 |
4.3 Compensation for Growth
AEO has a very decent profitability rating, which may justify a higher PE ratio.
AEO's earnings are expected to decrease with -3.92% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)2.59
EPS Next 2Y-16.26%
EPS Next 3Y-3.92%
5. Dividend
5.1 Amount
AEO has a Yearly Dividend Yield of 4.94%, which is a nice return.
AEO's Dividend Yield is rather good when compared to the industry average which is at 4.86. AEO pays more dividend than 91.74% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, AEO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.94% |
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
47.54% of the earnings are spent on dividend by AEO. 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.
DP47.54%
EPS Next 2Y-16.26%
EPS Next 3Y-3.92%
9.9
-0.22 (-2.17%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners106.96%
Inst Owner Change0%
Ins Owners6.84%
Ins Owner Change8.6%
Market Cap1.72B
Analysts53.68
Price Target11.9 (20.2%)
Short Float %10.79%
Short Ratio2.21
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.94% |
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)0%
PT rev (3m)-16.67%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-29.52%
EPS NY rev (1m)-24.93%
EPS NY rev (3m)-46.18%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.72%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.72%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.84 | ||
| Fwd PE | 8.07 | ||
| P/S | 0.33 | ||
| P/FCF | 8.3 | ||
| P/OCF | 3.73 | ||
| P/B | 1.16 | ||
| P/tB | 1.42 | ||
| EV/EBITDA | 3.35 |
EPS(TTM)1.12
EY11.31%
EPS(NY)1.23
Fwd EY12.4%
FCF(TTM)1.19
FCFY12.05%
OCF(TTM)2.66
OCFY26.83%
SpS30.44
BVpS8.51
TBVpS6.97
PEG (NY)N/A
PEG (5Y)2.59
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 | 3.08 |
F-Score4
WACC9.55%
ROIC/WACC0.76
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-54.12%
EPS Next 2Y-16.26%
EPS Next 3Y-3.92%
EPS Next 5YN/A
Revenue 1Y (TTM)-0.95%
Revenue growth 3Y2.07%
Revenue growth 5Y4.34%
Sales Q2Q%-4.74%
Revenue Next Year-3.18%
Revenue Next 2Y-0.64%
Revenue Next 3Y0.12%
Revenue Next 5YN/A
EBIT growth 1Y-24.91%
EBIT growth 3Y-9.64%
EBIT growth 5Y7.23%
EBIT Next Year5.62%
EBIT Next 3Y6.82%
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%