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Should Value Investors Buy American Eagle Outfitters (AEO) Stock?
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is American Eagle Outfitters (AEO - Free Report) . AEO is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 13.89, which compares to its industry's average of 14.42. Over the past year, AEO's Forward P/E has been as high as 19.09 and as low as 9.32, with a median of 12.75.
Another notable valuation metric for AEO is its P/B ratio of 2.15. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.61. AEO's P/B has been as high as 2.15 and as low as 1.22, with a median of 1.67, over the past year.
Finally, our model also underscores that AEO has a P/CF ratio of 8.25. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 14. Within the past 12 months, AEO's P/CF has been as high as 9.96 and as low as 4.68, with a median of 7.65.
Designer Brands (DBI - Free Report) may be another strong Retail - Apparel and Shoes stock to add to your shortlist. DBI is a # 2 (Buy) stock with a Value grade of A.
Furthermore, Designer Brands holds a P/B ratio of 1.73 and its industry's price-to-book ratio is 3.61. DBI's P/B has been as high as 2.73, as low as 0.94, with a median of 1.49 over the past 12 months.
These are just a handful of the figures considered in American Eagle Outfitters and Designer Brands's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that AEO and DBI is an impressive value stock right now.
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Should Value Investors Buy American Eagle Outfitters (AEO) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is American Eagle Outfitters (AEO - Free Report) . AEO is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 13.89, which compares to its industry's average of 14.42. Over the past year, AEO's Forward P/E has been as high as 19.09 and as low as 9.32, with a median of 12.75.
Another notable valuation metric for AEO is its P/B ratio of 2.15. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.61. AEO's P/B has been as high as 2.15 and as low as 1.22, with a median of 1.67, over the past year.
Finally, our model also underscores that AEO has a P/CF ratio of 8.25. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 14. Within the past 12 months, AEO's P/CF has been as high as 9.96 and as low as 4.68, with a median of 7.65.
Designer Brands (DBI - Free Report) may be another strong Retail - Apparel and Shoes stock to add to your shortlist. DBI is a # 2 (Buy) stock with a Value grade of A.
Furthermore, Designer Brands holds a P/B ratio of 1.73 and its industry's price-to-book ratio is 3.61. DBI's P/B has been as high as 2.73, as low as 0.94, with a median of 1.49 over the past 12 months.
These are just a handful of the figures considered in American Eagle Outfitters and Designer Brands's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that AEO and DBI is an impressive value stock right now.