Fact based stock research
American Eagle Outfitters (NYSE:AEO)

US02553E1064

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

American Eagle Outfitters stock research in summary

ae.com

ANALYSIS: With an Obermatt Combined Rank of 98 (better than 98% compared with investment alternatives), American Eagle Outfitters (Apparel Retail, USA) shares have much better financial characteristics than comparable stocks. Shares of American Eagle Outfitters are a good value (attractively priced) with a consolidated Value Rank of 85 (better than 85% of alternatives), show above-average growth (Growth Rank of 77), and are safely financed (Safety Rank of 66), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 98, is a strong buy recommendation based on American Eagle Outfitters's financial characteristics. As the company American Eagle Outfitters's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 85), above-average growth (Obermatt Growth Rank of 77), and indicate that the company is safely financed (Obermatt Safety Rank of 66), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of American Eagle Outfitters. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	85
Growth Rank	77
Safety Rank	66
Combined Rank	98

Country	USA
Industry	Apparel Retail
Index	Dividends USA, S&P MIDCAP
Size class	X-Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: American Eagle Outfitters

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	55	67	68	85
GROWTH
GROWTH	84	77	99	77
SAFETY
SAFETY	47	72	75	66
SENTIMENT
SENTIMENT	n/a	89	48	^new
360° VIEW
360° VIEW	n/a	93	93	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 3-Aug-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better American Eagle Outfitters is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	55	67	68	85
GROWTH
GROWTH	84	77	99	77
SAFETY
SAFETY	47	72	75	66
COMBINED
COMBINED	79	53	67	98

Last update of combined financial performance: 4-Jul-2024. Stock analysis on combined financial performance: The higher the rank of American Eagle Outfitters the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 85 (better than 85% compared with alternatives) for 2024, American Eagle Outfitters shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for American Eagle Outfitters. Price-to-Profit (also referred to as price-earnings, P/E) is 77 which means that the stock price compared with what market professionals expect for future profits is lower than for 77% of comparable companies, indicating a good value concerning American Eagle Outfitters's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 47, which means that the stock price is lower as regards to invested capital than for 47% of comparable investments. On the other hand, Price-to-Sales is less favorable than 56% of alternatives (only 44% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 12% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 85, is a buy recommendation based on American Eagle Outfitters's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	45	42	41	44
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	61	47	54	77
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	28	48	50	47
DIVIDEND YIELD
DIVIDEND YIELD	70	84	84	88
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	55	67	68	85

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of American Eagle Outfitters; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 77 (better than 77% compared with alternatives) for 2024, American Eagle Outfitters shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for American Eagle Outfitters. Profit Growth, with a rank of 83 (better than 83% of its competitors), and Capital Growth, with a rank of 85, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 45, which means that, currently, professionals expect the company to grow less than 55% of its competitors, and Stock Returns are at a rank of 33. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 77, is a buy recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	64	79	47	45
PROFIT GROWTH
PROFIT GROWTH	9	96	90	83
CAPITAL GROWTH
CAPITAL GROWTH	n/a	30	93	85
STOCK RETURNS
STOCK RETURNS	76	45	91	33
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	84	77	99	77

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of American Eagle Outfitters.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 66 (better than 66% compared with alternatives), the company American Eagle Outfitters has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of American Eagle Outfitters is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for American Eagle Outfitters.Leverage is at 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors.Refinancing is at a rank of 59, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 59% of its competitors. Liquidity is at 1, meaning that the company generates less profit to service its debt than 99% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 66 (better than 66% compared with alternatives), American Eagle Outfitters has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. Investors should compare Obermatt’s Value, Growth, and Sentiment Ranks before deciding. They may also want to investigate why cash flows are expected to be low, making debt service for American Eagle Outfitters more challenging. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	43	68	81	100
REFINANCING
REFINANCING	51	76	52	59
LIQUIDITY
LIQUIDITY	41	72	76	1
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	47	72	75	66

Last update of Safety Rank: 4-Jul-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of American Eagle Outfitters and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	50	25	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	92	60	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	75	70	^new
MARKET PULSE
MARKET PULSE	n/a	66	49	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	89	48	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for American Eagle Outfitters.
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