American Eagle (AEO) AI Stock Analysis

• Market Cap: $1.88B
• Dividend Yield: 4.61%
• Average Volume (3M): 7.34M
• Price to Earnings (P/E): 6.5
• Beta (1Y): 0.93
• Revenue Growth: 1.27%
• EPS Growth: 96.32%
• Country: US
• Employees: 9,000
• Sector: Consumer Cyclical
• Sector Strength: 76
• Industry: Apparel - Retail
• EPS (TTM): 0.53
• Shares Outstanding: 173,264,680
• 10 Day Avg. Volume: 9,366,737
• 30 Day Avg. Volume: 7,344,422
• PEG Ratio: 0.15
• Price to Book (P/B): 1.20
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.56
• Enterprise Value/Market Cap: 1.63
• Enterprise Value/Revenue: 0.14
• Enterprise Value/Gross Profit: 1.50
• Enterprise Value/Ebitda: 1.34
• 1Y Price Target: $13.45
• Price Target Upside: 25.70% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

• Rating: 71 Outperform
• Price Target: $12.00 ▲( 12.15% Upside)

American Eagle's solid financial performance and attractive valuation are significant strengths, bolstered by strong cash flow and improved profit margins. However, technical indicators suggest bearish momentum, and the outlook for 2025 is tempered by economic challenges. The company's proactive strategies and dividend yield offer some cushioning against market volatility.

Positive Factors

Inventory Management

Entering 2Q, management noted inventory is more aligned to sales trends thanks to the write-down, allowing for a more normalized margin profile.

Product Strength

On the encouraging side, pockets of relative strength included denim at AE and the Offline business.

Valuation

The stock is currently trading at 3x EV/EBITDA, lower than its 5-5.5x historical avg.

Negative Factors

Financial Performance

Management suspended F25 guidance after pre-announcing weak 1Q results, highlighting uncertainties in the company's future performance.

Inventory Challenges

The largest driver of the $75M inventory write-down in 1Q was due to aerie apparel fashion misses, raising concerns about product assortment.

Market Sentiment

Investor sentiment remains very negative with shares trading below consensus estimates, indicating concerns over AEO's current market position.

American Eagle Business Overview & Revenue Model

Company Description

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.

How the Company Makes Money

American Eagle makes money primarily through the sale of its apparel, accessories, and personal care products under the American Eagle and Aerie brands. Its revenue model is predominantly based on retail sales from its network of physical stores and a growing e-commerce platform. The company also generates income through its loyalty programs and credit card partnerships, which encourage repeat purchases and enhance customer engagement. Additionally, AEO benefits from strategic partnerships and collaborations that expand its product offerings and market reach. Key factors contributing to its earnings include brand strength, product innovation, a strong digital presence, and effective supply chain management.

American Eagle Financial Statement Overview

Summary

American Eagle demonstrates a solid financial performance with consistent revenue growth and strong cash flow generation. The company maintains reasonable leverage, although its equity ratio suggests some reliance on debt. The income statement reveals improved profit margins, while the cash flow statement underscores the company's ability to generate free cash flow effectively. Despite fluctuations in net income historically, the overall trajectory remains positive, making American Eagle a stable entity in the retail sector.

Income Statement

American Eagle's income statement shows robust revenue growth with a 1.27% increase from 2024 to 2025. The gross profit margin is a strong 39.18%, and the net profit margin has improved to 6.18%. Both EBIT and EBITDA margins have shown improvement, indicating enhanced operational efficiency. However, the net income has fluctuated in prior years, which could be a concern for stability.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.82, showing a balanced use of debt and equity financing. The return on equity is at 18.64%, which is a positive indicator of profitability. However, the equity ratio stands at 46.13%, suggesting a moderate reliance on liabilities. Overall, the company's leverage is manageable, but it could increase the risk during periods of financial stress.

Cash Flow

The cash flow statement highlights a strong free cash flow of $476.8 million, with a free cash flow growth rate of 17.34% from the previous year. The operating cash flow to net income ratio is 1.45, indicating good cash generation relative to net income. The free cash flow to net income ratio of 1.45 further underscores the company's solid cash position. This strong cash flow performance provides a cushion against financial volatility.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
5.33B	5.26B	4.99B	5.01B	3.76B
	Gross Profit
2.09B	2.02B	1.75B	1.99B	1.15B
	EBIT
427.30M	222.72M	247.05M	591.07M	288.31M
	EBITDA
665.39M	477.02M	404.98M	756.43M	-104.73M
	Net Income Common Stockholders
329.38M	170.04M	125.14M	419.63M	-209.27M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
358.96M	454.09M	170.21M	434.77M	850.48M
	Total Assets
3.83B	3.56B	3.42B	3.79B	3.43B
	Total Debt
1.45B	1.19B	1.37B	1.81B	1.80B
	Net Debt
1.14B	831.54M	1.20B	1.37B	952.18M
	Total Liabilities
2.06B	1.82B	1.82B	2.36B	2.35B
	Stockholders Equity
1.77B	1.74B	1.60B	1.42B	1.09B
Cash Flow		Free Cash Flow
254.26M	406.27M	145.92M	69.82M	74.52M
	Operating Cash Flow
476.80M	580.71M	406.30M	303.67M	202.50M
	Investing Cash Flow
-217.51M	-287.43M	-261.38M	-594.60M	-73.94M
	Financing Cash Flow
-301.91M	-109.47M	-407.89M	-125.20M	359.91M

American Eagle Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AEO, the sentiment is Negative. The current price of 10.7 is below the 20-day moving average (MA) of 11.32, below the 50-day MA of 11.26, and below the 200-day MA of 16.10, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 43.35 is Neutral, neither overbought nor oversold. The STOCH value of 6.33 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AEO.

American Eagle Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FDP	76 Outperform	$1.62B	11.05	7.51%	3.11%	-0.64%	―
RVLV	72 Outperform	$1.38B	27.53	11.97%	―	9.09%	106.50%
AEO	71 Outperform	$1.88B	6.47	18.80%	4.61%	1.27%	96.32%
WWW	68 Neutral	$1.33B	18.45	25.29%	2.38%	-13.05%	―
VSCO	67 Neutral	$1.82B	11.62	31.30%	―	0.76%	49.95%
Sector *	62 Neutral	$6.84B	11.22	2.83%	3.93%	2.65%	-21.93%
FL	56 Neutral	$2.28B	194.38	0.62%	―	-2.20%	―

American Eagle Corporate Events

American Eagle Boosts Q4 Profit Outlook and Returns

American Eagle Outfitters has announced an improved profit outlook for the fourth quarter of 2024, driven by better-than-expected holiday sales and growth across its brands, including American Eagle and Aerie. The company has revised its operating profit expectations to approximately $135 million, up from previous guidance, and has also reported significant shareholder returns through share repurchases and dividends.