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Are Investors Undervaluing American Eagle Outfitters (AEO) Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.
American Eagle Outfitters (AEO - Free Report) is a stock many investors are watching right now. AEO is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.29, which compares to its industry's average of 15.62. Over the past 52 weeks, AEO's Forward P/E has been as high as 19.09 and as low as 9.32, with a median of 13.11.
We also note that AEO holds a PEG ratio of 0.69. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AEO's industry currently sports an average PEG of 0.83. Over the past 52 weeks, AEO's PEG has been as high as 3.12 and as low as 0.69, with a median of 1.19.
We should also highlight that AEO has a P/B ratio of 1.96. The P/B is a method of comparing a stock's market value to 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 3.81. Over the past year, AEO's P/B has been as high as 2.33 and as low as 1.24, with a median of 1.80.
Finally, investors will want to recognize that AEO has a P/CF ratio of 7.54. 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 P/CF compares to its industry's average P/CF of 13.93. Within the past 12 months, AEO's P/CF has been as high as 9.96 and as low as 6.01, with a median of 7.82.
Genesco (GCO - Free Report) may be another strong Retail - Apparel and Shoes stock to add to your shortlist. GCO is a # 2 (Buy) stock with a Value grade of A.
Additionally, Genesco has a P/B ratio of 0.73 while its industry's price-to-book ratio sits at 3.81. For GCO, this valuation metric has been as high as 1.19, as low as 0.39, with a median of 0.72 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that American Eagle Outfitters and Genesco are likely undervalued currently. And when considering the strength of its earnings outlook, AEO and GCO sticks out as one of the market's strongest value stocks.
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Are Investors Undervaluing American Eagle Outfitters (AEO) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.
American Eagle Outfitters (AEO - Free Report) is a stock many investors are watching right now. AEO is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.29, which compares to its industry's average of 15.62. Over the past 52 weeks, AEO's Forward P/E has been as high as 19.09 and as low as 9.32, with a median of 13.11.
We also note that AEO holds a PEG ratio of 0.69. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AEO's industry currently sports an average PEG of 0.83. Over the past 52 weeks, AEO's PEG has been as high as 3.12 and as low as 0.69, with a median of 1.19.
We should also highlight that AEO has a P/B ratio of 1.96. The P/B is a method of comparing a stock's market value to 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 3.81. Over the past year, AEO's P/B has been as high as 2.33 and as low as 1.24, with a median of 1.80.
Finally, investors will want to recognize that AEO has a P/CF ratio of 7.54. 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 P/CF compares to its industry's average P/CF of 13.93. Within the past 12 months, AEO's P/CF has been as high as 9.96 and as low as 6.01, with a median of 7.82.
Genesco (GCO - Free Report) may be another strong Retail - Apparel and Shoes stock to add to your shortlist. GCO is a # 2 (Buy) stock with a Value grade of A.
Additionally, Genesco has a P/B ratio of 0.73 while its industry's price-to-book ratio sits at 3.81. For GCO, this valuation metric has been as high as 1.19, as low as 0.39, with a median of 0.72 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that American Eagle Outfitters and Genesco are likely undervalued currently. And when considering the strength of its earnings outlook, AEO and GCO sticks out as one of the market's strongest value stocks.