American Eagle (AEO) AI Stock Analysis

• Market Cap: $1.80B
• Dividend Yield: 4.81%
• Average Volume (3M): 8.17M
• Price to Earnings (P/E): 10.6
• Beta (1Y): 0.97
• Revenue Growth: -0.95%
• EPS Growth: -10.51%
• Country: US
• Employees: 9,000
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Apparel - Retail
• EPS (TTM): -0.29
• Shares Outstanding: 173,268,230
• 10 Day Avg. Volume: 10,024,546
• 30 Day Avg. Volume: 8,171,263
• PEG Ratio: -0.31
• Price to Book (P/B): 1.78
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 19.51
• Enterprise Value/Market Cap: 2.25
• Enterprise Value/Revenue: 0.19
• Enterprise Value/Gross Profit: 1.99
• Enterprise Value/Ebitda: 1.77
• 1Y Price Target: $11.45
• Price Target Upside: 13.25% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

• Rating: 64 Neutral
• Price Target: $11.00 ▲(8.80%Upside)

American Eagle's overall stock score reflects solid financial performance and attractive valuation metrics. However, technical analysis indicates bearish momentum, and recent earnings challenges, including an inventory write-down and margin pressure, weigh on the outlook. The company's strategic initiatives may provide long-term growth potential, but near-term risks are significant.

Positive Factors

Growth Expectations

Management cited expectations for sequentially improved growth, profitability, and cash flows as the year progresses with fresh inventory hitting shelves.

Inventory Management

Management expects inventory to be more aligned with sales trends following the write-down, potentially improving future sales.

Negative Factors

Cost Impact

Tariffs are expected to negatively impact the cost of goods sold by $40 million in the fiscal year, affecting profitability.

Guidance and Forecast

AEO withdrew its fiscal year guidance, indicating uncertainty about future performance.

Market Sentiment

Investor sentiment remains very negative with shares trading below consensus estimates, indicating concerns over AEO's current market position.

Profitability

Profitability was well below initial consensus expectations due to product mis-execution, leading to a significant inventory write-down.

American Eagle Business Overview & Revenue Model

Company Description

American Eagle Outfitters, Inc. (AEO) is a leading global specialty retailer that offers high-quality, on-trend clothing, accessories, and personal care products at affordable prices. Established in 1977 and headquartered in Pittsburgh, Pennsylvania, the company operates under two primary brands: American Eagle and Aerie. American Eagle focuses on casual and versatile apparel for young men and women, while Aerie specializes in intimate wear, activewear, and swimwear catering to a female demographic. AEO is known for its commitment to inclusivity, diversity, and sustainability in its products and marketing efforts.

How the Company Makes Money

American Eagle makes money primarily through the sale of its apparel, accessories, and personal care products under the American Eagle and Aerie brands. Its revenue model is predominantly based on retail sales from its network of physical stores and a growing e-commerce platform. The company also generates income through its loyalty programs and credit card partnerships, which encourage repeat purchases and enhance customer engagement. Additionally, AEO benefits from strategic partnerships and collaborations that expand its product offerings and market reach. Key factors contributing to its earnings include brand strength, product innovation, a strong digital presence, and effective supply chain management.

American Eagle Financial Statement Overview

Summary

American Eagle demonstrates a solid financial performance with consistent revenue growth and strong cash flow generation. The company maintains reasonable leverage, although its equity ratio suggests some reliance on debt. Despite fluctuations in net income historically, the overall trajectory remains positive, making American Eagle a stable entity in the retail sector.

Income Statement

American Eagle's income statement shows robust revenue growth with a 1.27% increase from 2024 to 2025. The gross profit margin is a strong 39.18%, and the net profit margin has improved to 6.18%. Both EBIT and EBITDA margins have shown improvement, indicating enhanced operational efficiency. However, the net income has fluctuated in prior years, which could be a concern for stability.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.82, showing a balanced use of debt and equity financing. The return on equity is at 18.64%, which is a positive indicator of profitability. However, the equity ratio stands at 46.13%, suggesting a moderate reliance on liabilities. Overall, the company's leverage is manageable, but it could increase the risk during periods of financial stress.

Cash Flow

The cash flow statement highlights a strong free cash flow of $476.8 million, with a free cash flow growth rate of 17.34% from the previous year. The operating cash flow to net income ratio is 1.45, indicating good cash generation relative to net income. The free cash flow to net income ratio of 1.45 further underscores the company's solid cash position. This strong cash flow performance provides a cushion against financial volatility.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
5.33B	5.26B	4.99B	5.01B	3.76B
	Gross Profit
2.09B	2.02B	1.75B	1.99B	1.15B
	EBIT
427.30M	222.72M	247.05M	591.07M	288.31M
	EBITDA
665.39M	477.02M	404.98M	756.43M	-104.73M
	Net Income Common Stockholders
329.38M	170.04M	125.14M	419.63M	-209.27M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
358.96M	454.09M	170.21M	434.77M	850.48M
	Total Assets
3.83B	3.56B	3.42B	3.79B	3.43B
	Total Debt
1.45B	1.19B	1.37B	1.81B	1.80B
	Net Debt
1.14B	831.54M	1.20B	1.37B	952.18M
	Total Liabilities
2.06B	1.82B	1.82B	2.36B	2.35B
	Stockholders Equity
1.77B	1.74B	1.60B	1.42B	1.09B
Cash Flow		Free Cash Flow
254.26M	406.27M	145.92M	69.82M	74.52M
	Operating Cash Flow
476.80M	580.71M	406.30M	303.67M	202.50M
	Investing Cash Flow
-217.51M	-287.43M	-261.38M	-594.60M	-73.94M
	Financing Cash Flow
-301.91M	-109.47M	-407.89M	-125.20M	359.91M

American Eagle Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.11
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AEO, the sentiment is Negative. The current price of 10.11 is below the 20-day moving average (MA) of 10.92, below the 50-day MA of 10.96, and below the 200-day MA of 15.49, indicating a bearish trend. The MACD of -0.30 indicates Positive momentum. The RSI at 38.97 is Neutral, neither overbought nor oversold. The STOCH value of 18.75 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AEO.

American Eagle Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FDP	76 Outperform	$1.55B	10.55	7.51%	3.72%	-0.64%	―
RVLV	76 Outperform	$1.56B	31.04	11.97%	―	9.09%	106.50%
WWW	68 Neutral	$1.52B	21.19	25.29%	2.15%	-13.05%	―
AEO	64 Neutral	$1.80B	10.63	12.19%	4.81%	-0.95%	-10.51%
Sector *	63 Neutral	$6.98B	11.41	2.80%	4.24%	2.68%	-24.94%
VSCO	62 Neutral	$1.77B	11.29	31.30%	―	1.45%	―
FL	56 Neutral	$2.30B	194.63	-13.07%	―	-2.62%	―

American Eagle Corporate Events

American Eagle Boosts Q4 Profit Outlook and Returns

American Eagle Outfitters has announced an improved profit outlook for the fourth quarter of 2024, driven by better-than-expected holiday sales and growth across its brands, including American Eagle and Aerie. The company has revised its operating profit expectations to approximately $135 million, up from previous guidance, and has also reported significant shareholder returns through share repurchases and dividends.