American Eagle (AEO) AI Stock Analysis

• Market Cap: $4.72B
• Dividend Yield: 2.09%
• Average Volume (3M): 9.03M
• Price to Earnings (P/E): 24.0
• Beta (1Y): 1.30
• Revenue Growth: -1.15%
• EPS Growth: -0.98%
• Country: US
• Employees: 9,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): 0.53
• Shares Outstanding: 169,512,010
• 10 Day Avg. Volume: 9,365,584
• 30 Day Avg. Volume: 9,028,835
• PEG Ratio: 0.10
• Price to Book (P/B): 1.76
• Price to Sales (P/S): 0.58
• P/FCF Ratio: 12.25
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 0.89
• Enterprise Value/Gross Profit: 2.70
• Enterprise Value/Ebitda: 9.21
• 1Y Price Target: $23.10
• Price Target Upside: -15.07% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 11
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 77 Outperform
• Price Target: $27.00 ▼(-0.74% Downside)

American Eagle's overall stock score is driven by strong technical indicators and a positive earnings call, reflecting confidence in future growth. However, financial performance concerns, particularly in profitability and cash flow, and a high valuation relative to peers, temper the outlook.

Positive Factors

Revenue Growth

The 6% revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability.

Aerie Brand Performance

Aerie's 11% comp growth highlights its strong market position and potential for continued expansion in the apparel sector.

Operational Improvements

Cost control and efficiency improvements enhance profitability and operational resilience, benefiting long-term performance.

Negative Factors

Profitability Margins Decline

Declining profitability margins may indicate challenges in cost management and pricing power, affecting long-term earnings potential.

Cash Flow Challenges

The decline in free cash flow growth suggests potential liquidity issues, which could limit investment and growth opportunities.

Increased SG&A Expenses

Rising SG&A expenses can pressure operating margins, potentially impacting profitability if not offset by revenue growth.

American Eagle Business Overview & Revenue Model

Company Description

American Eagle Outfitters, Inc. operates as a specialty retailer that provides clothing, accessories, and personal care products under the American Eagle and Aerie brands. The company provides jeans, and specialty apparel and accessories for women and men; and intimates, apparel, activewear, and swim collections, as well as personal care products for women. It also offers graphic tees and other clothing products under the Tailgate brand name; and menswear products under the Todd Snyder New York brand name. As of January 29, 2022, the company operated 880 American Eagle stores, 244 Aerie brand stand-alone stores, and five Todd Snyder stores in the United States, Canada, Mexico, and Hong Kong. It also ships to 81 countries through its Websites; and offers its merchandise at 260 locations operated by licensees in 28 countries, as well as provides products through its Websites ae.com, aerie.com, and toddsnyder.com. American Eagle Outfitters, Inc. was founded in 1977 and is headquartered in Pittsburgh, Pennsylvania.

How the Company Makes Money

American Eagle generates revenue primarily through the sale of its apparel and accessories in both physical retail stores and online. The company adopts a multi-channel retail model that allows it to reach a wide audience, leveraging e-commerce as a significant revenue stream alongside traditional brick-and-mortar sales. Key revenue streams include sales from American Eagle and Aerie branded products, with Aerie experiencing notable growth in recent years due to increasing demand for comfortable and body-positive apparel. Additionally, AEO benefits from seasonal promotions, loyalty programs, and partnerships with various social media influencers and platforms to enhance brand visibility and drive sales. The company's ability to adapt to changing consumer trends and preferences, alongside its focus on sustainability and inclusivity, further contributes to its financial performance.

American Eagle Financial Statement Overview

Summary

American Eagle's financial performance is mixed. While revenue growth is stable, profitability margins have declined, and cash flow metrics indicate potential liquidity concerns. The balance sheet remains relatively strong with moderate leverage, but the reduced return on equity suggests challenges in generating returns.

Income Statement

American Eagle's income statement reflects a stable revenue growth trajectory with a TTM revenue growth rate of 1.4%. However, there is a noticeable decline in profitability margins, with the TTM gross profit margin at 33.9% and net profit margin at 3.9%, both lower than previous periods. The EBIT and EBITDA margins have also decreased, indicating pressure on operational efficiency.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 1.08 in the TTM, suggesting a balanced approach to leveraging. However, the return on equity has decreased to 13% from higher levels in previous years, indicating reduced profitability from equity. The equity ratio remains stable, reflecting a solid asset base.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 28.7% in the TTM, highlighting potential liquidity challenges. The operating cash flow to net income ratio is 0.48, indicating moderate cash generation relative to net income. The free cash flow to net income ratio of 0.69 suggests adequate cash flow coverage, though lower than previous periods.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.34B	5.33B	5.26B	4.99B	5.01B	3.76B
Gross Profit	1.76B	1.88B	1.81B	1.54B	1.83B	985.75M
EBITDA	515.53M	658.86M	477.02M	404.98M	756.43M	-104.73M
Net Income	208.42M	329.38M	170.04M	125.14M	419.63M	-209.27M
Balance Sheet
Total Assets	4.19B	3.83B	3.56B	3.42B	3.79B	3.43B
Cash, Cash Equivalents and Short-Term Investments	112.83M	358.96M	454.09M	170.21M	434.77M	850.48M
Total Debt	1.97B	1.45B	1.19B	1.37B	1.81B	1.80B
Total Liabilities	2.56B	2.06B	1.82B	1.82B	2.36B	2.35B
Stockholders Equity	1.63B	1.77B	1.74B	1.60B	1.42B	1.09B
Cash Flow
Free Cash Flow	289.51M	254.26M	406.27M	145.92M	69.82M	74.52M
Operating Cash Flow	424.04M	476.80M	580.71M	406.30M	303.67M	202.50M
Investing Cash Flow	-295.41M	-217.51M	-287.43M	-261.38M	-594.60M	-73.94M
Financing Cash Flow	-178.52M	-301.91M	-109.47M	-407.89M	-125.20M	359.91M

American Eagle Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 27.20
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AEO, the sentiment is Positive. The current price of 27.2 is above the 20-day moving average (MA) of 23.88, above the 50-day MA of 19.56, and above the 200-day MA of 14.03, indicating a bullish trend. The MACD of 2.42 indicates Negative momentum. The RSI at 74.20 is Negative, neither overbought nor oversold. The STOCH value of 88.58 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AEO.

American Eagle Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ANF	78 Outperform	$5.55B	11.96	40.72%	―	7.57%	1.75%
URBN	78 Outperform	$7.29B	15.15	19.34%	―	11.09%	51.51%
AEO	77 Outperform	$4.72B	24.03	12.36%	2.09%	-1.15%	-0.98%
BKE	72 Outperform	$2.87B	13.79	41.26%	6.82%	4.67%	3.46%
VSCO	71 Outperform	$4.55B	27.11	31.50%	―	2.97%	9.85%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
FL	44 Neutral	―	―	―	―	-3.58%	-4.20%