Fundamental analysis: American Eagle Outfitters, Inc. (AEO)

Awarener score: 7.1

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Very good), the business stability (Very good) and growth (Lacking), and the company's inclination to return cash to the stockholders (Excellent).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 6.0

Business has been slightly shrinking. It's been almost average when measured against peer companies.
American Eagle Outfitters, Inc. business trend stability is very good. The higher the stability, the lower the risk. It looks better than most rivals.

Margins score: 5.5

AEO profit margins -on goods and services sold- are usually hardly sufficient. They stand somewhat worse than rival companies.
Business profit on sales tends to be sufficient. It's similar to competitors.
Profits on sales made -available to repay debt and purchase properties- are usually hardly sufficient. They remain close to average when compared to peers.
Earnings -before income taxes and interests on loans taken- tend to be hardly sufficient in relation to total revenues. They're still slightly better than similar companies.
Profits -before income taxes- are usually sufficient considering total sales, and remain almost average when measured against rivals.
Total net profit tends to be sufficient when confronted to sales. Company stands almost average when measured against comparable firms.

Growth score: 2.7

American Eagle Outfitters, Inc. profit -on goods and services sold- has been growing at a very low pace. It's been lacking compared to competitors.
In recent years, the firm hasn't always been able to profit from operations, which has been bottom tier against comparable firms.
Profits -available to repay debt and purchase properties- have been growing at an extremely fast pace, which compares top tier when measured against peer enterprises.
In the previous years, the firm couldn't always make a profit -before income taxes and interests on loans taken-. It turns to be a disappointment compared to similar stocks.
In past years, at least once the company lost money -before income taxes-. It was bottom tier against rivals.
In the previous years, the firm had at least a total net loss, and last-in-rank when measured against peer companies.
The company lost money at least once in the past years. It's been a disappointment compared to industry peers.

Miscellaneous score: 4.0

AEO had to pay substantial income taxes in relation to profits made in the past years. It's been somewhat better than peers.
The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 7.2

American Eagle Outfitters, Inc. usually gets very good returns on the resources it controls. It proves almost average when measured against peer firms.
The company normally gets sufficient proceeds -on the resources directly invested in the business-. They remain close to average when compared to similar companies.
There's usually abundant profitability -in relation to owned resources-. It ranks almost average when measured against competitors.
In the past, got good returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's almost average when measured against comparable enterprises.

Usage of Funds score: 5.5

AEO usually uses a portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is rather normal. It stands almost average when measured against rival firms.
The company is usually somewhat investing in new property, plant, and equipment, to improve its operating capabilities, which is almost average when measured against industry peers.
In the past twelve months it paid some dividends, considering the current stock price. It came somewhat worse than competitors.
Dividend payments have been more or less stable in recent years. The company has behaved close to average when compared to similar firms.
The company usually uses some portion of genuine funds generated to pay dividends. Dividend payments should be safe, unless business prospects take a nosedive. Sustainability looks somewhat worse than comparable companies.
The company somewhat enlarges a bit the pool of investors, resulting in more mouths feeding on the pie of profits. It remains in a very weak position compared to peer enterprises.
Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands close to average when compared to rivals.
The company uses a large portion of genuine fund generation to reward investors, which can probably be sustained for as long as business doesn't turn sour. It still looks encouraging in relation to competitors.

Balance Sheet score: 4.9

American Eagle Outfitters, Inc. intangible assets (like brands and goodwill) represent a modest portion of resources controlled, according to accounting books. There could be some difficulties in liquidating them if the company ever gets in financial distress. It happens to be substantially worse when measured against peer companies.
The company has more short-term resources than short-term obligations. Liquidity concerns shouldn't be an issue. It turns to be rather normal in relation to similar firms.
Most resources controlled were provided for with financial debt. Creditors have more claims on the company than shareholders. Unless the company is a financial institution that takes deposits, the situation might be very risky. It remains somewhat worse than rival firms.
Controlled resources might be turned into cash and equivalents neither fast nor too slow. Liquidity and risk might be run-of-the-mill. It looks substantially worse when measured against rivals.
For every dollar of short-term obligations, the company has less than a dollar of cash and short-term receivables. It's close to average when compared to peer firms.
For every dollar of short-term obligations, the company has very few cents of cash and equivalents, which is mediocre against similar enterprises.
Usually, sales are on less than a month credit. It still ranks last-in-rank when measured against peers.
Normally has approximately somewhat more than two months of sales worth in inventory. It comes up as a slight improvement compared to competitors.
On average, it takes higher than three months from the purchase to charging customers. It happens to be slightly worse than peers.
On average pays suppliers before a month since the purchase. It ranks substantially worse when measured against industry peers.
The company pays its suppliers roughly two months before charging its customers, so there's some money invested in working capital. It's lacking compared to similar companies.
Net interest expenses consume a significant portion of usual business earnings, but are mostly bearable. It stands mediocre against rival firms.
Business earnings have usually been quite good when measured against loans taken. Cutting back reinvesting in the business, it could take around three years to repay the obligations with current profitability. It ranks similar to comparable enterprises.
Revenues are somewhat low in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks in a weak position compared to similar firms.
Resource exploitation is excellent when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still slightly worse than peer companies.

Valuation score: 6.5

American Eagle Outfitters, Inc. looks very expensive in relation to profits and financial position. It happens to be weak when measured against competitors.
Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains close to average when compared to peers.
In the past twelve months, the company generated some good free funds in relation to the stock price, which stands somewhat better than similar companies.
The company usually generates more than enough genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share might be interesting. It's still encouraging in relation to industry firms.
In the past twelve months, the company has rewarded investors, considering both dividends and share on the pie of earnings. It came up a slight improvement compared to peer ventures.
The company is largely indebted. It should focus on loan repayment before rewarding stockholders. It looks slightly worse than similar enterprises.
Considering the past twelve months, traditional Price-to-Earnings relation is somewhat high. Improvement expectations are already in the stock price, which presents some risks. It ranks below average when measured against peer companies.
Comparing the current stock price with the past twelve-months revenues gives a low relationship. One common cause includes profitability being poor. It looks in a weak position compared to rival firms.
The relation between the stock price and accounting book value might be reasonable. It's important both to check this metric through time and to compare it with rival companies. The company remains slightly better than peer firms.
In the past twelve months, the operating business earned some money when compared to the current stock price and financial position. It happens to be almost average when measured against industry peers.
In an alternate metric of bang for the buck, the company has usually shown a good earnings power ability when measured against the current stock price and financial position. It's still rather normal in relation to peer companies.

Total score: 5.3

Company at a glance: American Eagle Outfitters, Inc. (AEO)

Sector, industry: Consumer Cyclical, Apparel Retail

Market Cap: 2.18 billions

Revenues TTM: 5.02 billions

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.