Today's Post-Market Loser: American Eagle Outfitters (AEO)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified American Eagle Outfitters ( AEO) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified American Eagle Outfitters as such a stock due to the following factors:

  • AEO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $64.0 million.
  • AEO is down 3% today from today's close.

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More details on AEO:

American Eagle Outfitters, Inc., together with its subsidiaries, operates as an apparel and accessories retailer in the United States and Canada. The stock currently has a dividend yield of 3.3%. AEO has a PE ratio of 13.5. Currently there are 4 analysts that rate American Eagle Outfitters a buy, no analysts rate it a sell, and 15 rate it a hold.

The average volume for American Eagle Outfitters has been 4.6 million shares per day over the past 30 days. American Eagle Outfitters has a market cap of $2.9 billion and is part of the services sector and retail industry. The stock has a beta of 0.57 and a short float of 5.4% with 2.27 days to cover. Shares are down 26.2% year to date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates American Eagle Outfitters as a buy. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $29.20 million or 35.65% when compared to the same quarter last year. In addition, AMERN EAGLE OUTFITTERS INC has also modestly surpassed the industry average cash flow growth rate of 29.22%.
  • AEO has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.97 is somewhat weak and could be cause for future problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Specialty Retail industry and the overall market on the basis of return on equity, AMERN EAGLE OUTFITTERS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • AEO, with its decline in revenue, underperformed when compared the industry average of 19.6%. Since the same quarter one year prior, revenues slightly dropped by 1.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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