American Eagle Outfitters Inc

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AEO : NYSE : Services
$11.14 up 0.29 | 2.67%
Today's Range: 10.73 - 11.16
Avg. Daily Volume: 5290900.0
05/22/17 - 4:01 PM ET

Financial Analysis


AMERN EAGLE OUTFITTERS INC's gross profit margin for the first quarter of its fiscal year 2017 has decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased. AMERN EAGLE OUTFITTERS INC has weak liquidity. Currently, the Quick Ratio is 0.72 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 3.76% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)761.84749.42
EBITDA ($mil)82.8497.46
EBIT ($mil)42.458.68
Net Income ($mil)25.2440.48


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)225.2238.98
Total Assets ($mil)1633.191596.3
Total Debt ($mil)0.00.0
Equity ($mil)1117.871077.31


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin36.4739.16
EBITDA Margin10.8713.0
Operating Margin5.577.83
Sales Turnover2.222.24
Return on Assets12.0714.38
Return on Equity17.6420.85
Debt Q1 FY17 Q1 FY16
Current Ratio1.821.74
Debt/Capital0.00.0
Interest Expense0.00.0
Interest Coverage0.00.0


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)181.89180.8
Div / share0.130.13
EPS0.140.22
Book value / share6.155.96
Institutional Own % n/a n/a
Avg Daily Volume5242187.05152084.0

Valuation


BUY. AMERN EAGLE OUTFITTERS INC's P/E ratio indicates a significant discount compared to an average of 24.15 for the Specialty Retail industry and a significant discount compared to the S&P 500 average of 25.02. To use another comparison, its price-to-book ratio of 1.77 indicates a discount versus the S&P 500 average of 3.00 and a significant discount versus the industry average of 21.43. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, AMERN EAGLE OUTFITTERS INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AEO 10.07 Peers 24.15   AEO NA Peers 14.62

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

AEO is trading at a significant discount to its peers.

 

Neutral. The P/CF ratio is the stock’s price divided by the sum of the company's cash flow from operations. It is useful for comparing companies with different capital requirements or financing structures.

Ratio not available.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
AEO 9.38 Peers 19.20   AEO NM Peers 1.71

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

AEO is trading at a significant discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

AEO's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AEO 1.77 Peers 21.43   AEO -6.90 Peers 35.40

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

AEO is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, AEO is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AEO 0.55 Peers 1.54   AEO 1.41 Peers 7.04

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

AEO is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

AEO significantly trails its peers on the basis of sales growth

 

 

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