American Eagle Outfitters (AEO) Down In Post-Market Activity

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 $52.5 million.
  • AEO is down 2.3% 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 4.3%. AEO has a PE ratio of 27.5. Currently there are 4 analysts that rate American Eagle Outfitters a buy, 2 analysts rate it a sell, and 11 rate it a hold.

The average volume for American Eagle Outfitters has been 5.2 million shares per day over the past 30 days. American Eagle Outfitters has a market cap of $2.3 billion and is part of the services sector and retail industry. The stock has a beta of 0.86 and a short float of 12% with 4.66 days to cover. Shares are down 16.9% 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 hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

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. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.21, which illustrates the ability to avoid short-term cash problems.
  • AEO, with its decline in revenue, slightly underperformed the industry average of 4.6%. Since the same quarter one year prior, revenues slightly dropped by 6.7%. 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, AMERN EAGLE OUTFITTERS INC reported lower earnings of $0.42 versus $1.31 in the prior year. This year, the market expects an improvement in earnings ($0.64 versus $0.42).
  • The gross profit margin for AMERN EAGLE OUTFITTERS INC is currently lower than what is desirable, coming in at 29.38%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 1.00% trails that of the industry average.
  • Net operating cash flow has decreased to $156.63 million or 44.98% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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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