Trade-Ideas: American Eagle Outfitters (AEO) Is Today's Post-Market Leader Stock

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 leader 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 $58.6 million.
  • AEO is up 4% 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 17.8. Currently there are 6 analysts that rate American Eagle Outfitters a buy, no analysts rate it a sell, and 11 rate it a hold.

The average volume for American Eagle Outfitters has been 4.5 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 0.62 and a short float of 3.9% with 1.96 days to cover. Shares are up 4.4% year-to-date as of the close of trading on Wednesday.

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

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 and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • 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 0.77 is somewhat weak and could be cause for future problems.
  • AEO, with its decline in revenue, underperformed when compared the industry average of 8.2%. Since the same quarter one year prior, revenues slightly dropped by 5.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • AMERN EAGLE OUTFITTERS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, AMERN EAGLE OUTFITTERS INC increased its bottom line by earning $1.31 versus $0.90 in the prior year. For the next year, the market is expecting a contraction of 42.0% in earnings ($0.76 versus $1.31).
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 26.65%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 68.29% compared to the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.

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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