AEO Intrinsic Stock Value – American Eagle Outfitters Reports In-Line EPS, Revenue Beats Expectations by $20M
December 4, 2023
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The company reported a GAAP earnings per share (EPS) of $0.49, which was in line with expectations, while its revenue of $1.3 billion exceeded estimates by $20 million. The strong performance was largely driven by better-than-expected sales with comparable store sales increasing 1% for the quarter compared to the same period last year. Overall, American Eagle Outfitters ($NYSE:AEO) reported an in-line EPS with revenue that exceeded expectations by $20 million, providing a positive outlook for the company’s future prospects.
Earnings
American Eagle Outfitters released their fiscal year 2024 (FY2024) Q2 earning report on July 31 2021, revealing total revenue of 1194.16M USD and net income of 121.51M USD. Compared to Q2 of the previous fiscal year, this represents a 0.3% decrease in total revenue and a 386.1% decrease in net income. Despite this decrease, total revenue from the last 3 years (FY2022 to FY2024) has seen a modest increase, reaching 1200.88M USD. The revenue beat expectations by $20M USD, showing potential for further growth in the near future.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for AEO. More…
| Total Revenues | Net Income | Net Margin |
| 5.08k | 218.31 | 4.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for AEO. More…
| Operations | Investing | Financing |
| 777.34 | -205.57 | -412.73 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for AEO. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 3.52k | 1.78k | 8.8 |
Key Ratios Snapshot
Some of the financial key ratios for AEO are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 10.3% | -5.0% | 5.0% |
| FCF Margin | ROE | ROA |
| 11.4% | 9.3% | 4.5% |
Share Price
American Eagle Outfitters (AEO) reported its fourth quarter results on Tuesday, which beat Wall Street expectations. The company cited the current market volatility as one of the factors contributing to the decline. Despite this, investors remain optimistic about the company’s prospects in the coming year. Live Quote…
Analysis – AEO Intrinsic Stock Value
At GoodWhale, we recently conducted an analysis of the wellbeing of AMERICAN EAGLE OUTFITTERS. After our analysis, we have determined that the fair value of AMERICAN EAGLE OUTFITTERS share is around $18.6, which was determined using our proprietary Valuation Line. However, at present, the stock is traded at $16.6, which is a fair price but is undervalued by 11.0%. This presents an opportunity for investors looking for undervalued stocks in the market. More…
Peers
American Eagle Outfitters Inc competes with Roots Corp, Aritzia Inc, and Zumiez Inc. for market share in the clothing retail industry. All four companies offer a variety of clothing and accessories for men, women, and children, but American Eagle Outfitters Inc has a few key differentiators. First, American Eagle Outfitters Inc operates more than 1,000 stores in the United States, compared to Roots Corp’s 85 stores, Aritzia Inc’s 97 stores, and Zumiez Inc’s 741 stores. Second, American Eagle Outfitters Inc’s product mix includes a larger proportion of private label merchandise than its competitors, which allows the company to control cost and maintain higher profit margins.
– Roots Corp ($TSX:ROOT)
Roots Corp is a Canadian retailer that specializes in selling outdoor lifestyle clothing and accessories. The company was founded in 1973 and today operates more than 120 stores across Canada. In addition to its retail stores, Roots also operates an online store and sells its products through wholesale channels.
Roots Corp has a market cap of 115.97M as of 2022. The company’s ROE for the same year is 12.62%.
– Aritzia Inc ($TSX:ATZ)
Aritzia Inc. is a Canadian women’s fashion retailer founded in 1984. The company operates over 80 stores across Canada and the United States under eight different banners. Aritzia offers a wide range of women’s clothing, accessories, and beauty products. The company has a market cap of 5.72B as of 2022 and a return on equity of 31.82%.
– Zumiez Inc ($NASDAQ:ZUMZ)
Zumiez Inc is a publicly traded company with a market capitalization of 407.32M as of 2022. The company has a strong return on equity of 16.06% and is involved in the retail industry. Zumiez Inc operates stores that sell apparel, footwear, and accessories for young men and women. The company’s focus is on action sports, such as skateboarding, snowboarding, and motocross.
Summary
The company reported a GAAP Earnings Per Share (EPS) of $0.49 which was in line with the consensus estimates.
However, their total revenue of $1.3B beat the consensus estimates by $20M. Despite the better-than-expected revenue, the stock price of AEO moved lower the same day of their earnings report. This likely reflects the fact that investors were looking for stronger EPS numbers from the company. All in all, AEO has reported strong revenue growth and is expected to continue to grow in the upcoming quarters. Investors should watch the EPS numbers for future reports and heed any selloff as a buying opportunity for this strong retailer.
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