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Is American Eagle Outfitters (AEO) a Great Value Stock Right Now?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is American Eagle Outfitters (AEO - Free Report) . AEO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 11.92, which compares to its industry's average of 16.17. Over the past 52 weeks, AEO's Forward P/E has been as high as 16.30 and as low as 10.58, with a median of 13.72.
AEO is also sporting a PEG ratio of 1.01. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AEO's industry has an average PEG of 1.44 right now. Over the last 12 months, AEO's PEG has been as high as 3.12 and as low as 0.58, with a median of 0.90.
Investors should also recognize that AEO has a P/B ratio of 2.44. 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 4.61. Over the past year, AEO's P/B has been as high as 2.98 and as low as 1.66, with a median of 2.32.
Finally, we should also recognize that AEO has a P/CF ratio of 9.69. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. AEO's current P/CF looks attractive when compared to its industry's average P/CF of 14.27. Within the past 12 months, AEO's P/CF has been as high as 12.90 and as low as 6.37, with a median of 9.05.
Value investors will likely look at more than just these metrics, but the above data helps show that American Eagle Outfitters is likely undervalued currently. And when considering the strength of its earnings outlook, AEO sticks out at as one of the market's strongest value stocks.
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Is American Eagle Outfitters (AEO) a Great Value Stock Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is American Eagle Outfitters (AEO - Free Report) . AEO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 11.92, which compares to its industry's average of 16.17. Over the past 52 weeks, AEO's Forward P/E has been as high as 16.30 and as low as 10.58, with a median of 13.72.
AEO is also sporting a PEG ratio of 1.01. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AEO's industry has an average PEG of 1.44 right now. Over the last 12 months, AEO's PEG has been as high as 3.12 and as low as 0.58, with a median of 0.90.
Investors should also recognize that AEO has a P/B ratio of 2.44. 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 4.61. Over the past year, AEO's P/B has been as high as 2.98 and as low as 1.66, with a median of 2.32.
Finally, we should also recognize that AEO has a P/CF ratio of 9.69. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. AEO's current P/CF looks attractive when compared to its industry's average P/CF of 14.27. Within the past 12 months, AEO's P/CF has been as high as 12.90 and as low as 6.37, with a median of 9.05.
Value investors will likely look at more than just these metrics, but the above data helps show that American Eagle Outfitters is likely undervalued currently. And when considering the strength of its earnings outlook, AEO sticks out at as one of the market's strongest value stocks.