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Are Investors Undervaluing American Eagle Outfitters (AEO) 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
American Eagle Outfitters (AEO - Free Report) is a stock many investors are watching right now. AEO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
AEO is also sporting a PEG ratio of 0.60. 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 PEG compares to its industry's average PEG of 0.73. AEO's PEG has been as high as 3.12 and as low as 0.60, with a median of 0.95, all within the past year.
Another notable valuation metric for AEO is its P/B ratio of 2.34. 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 attractive against its industry's average P/B of 3.83. AEO's P/B has been as high as 2.44 and as low as 1.24, with a median of 1.82, over the past year.
Finally, our model also underscores that AEO has a P/CF ratio of 8.99. 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 12.91. Over the past year, AEO's P/CF has been as high as 9.94 and as low as 6.01, with a median of 7.80.
The Gap (GPS - Free Report) may be another strong Retail - Apparel and Shoes stock to add to your shortlist. GPS is a # 1 (Strong Buy) stock with a Value grade of A.
The Gap is currently trading with a Forward P/E ratio of 17.37 while its PEG ratio sits at 1.45. Both of the company's metrics compare favorably to its industry's average P/E of 13.15 and average PEG ratio of 0.73.
Over the past year, GPS's P/E has been as high as 23.58, as low as -63.95, with a median of 14.63; its PEG ratio has been as high as 1.97, as low as -5.33, with a median of 0.95 during the same time period.
The Gap sports a P/B ratio of 2.93 as well; this compares to its industry's price-to-book ratio of 3.83. In the past 52 weeks, GPS's P/B has been as high as 3.31, as low as 1.25, with a median of 1.73.
Value investors will likely look at more than just these metrics, but the above data helps show that American Eagle Outfitters and The Gap are likely undervalued currently. And when considering the strength of its earnings outlook, AEO and GPS sticks out as one of the market's strongest value stocks.
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Are Investors Undervaluing American Eagle Outfitters (AEO) 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
American Eagle Outfitters (AEO - Free Report) is a stock many investors are watching right now. AEO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
AEO is also sporting a PEG ratio of 0.60. 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 PEG compares to its industry's average PEG of 0.73. AEO's PEG has been as high as 3.12 and as low as 0.60, with a median of 0.95, all within the past year.
Another notable valuation metric for AEO is its P/B ratio of 2.34. 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 attractive against its industry's average P/B of 3.83. AEO's P/B has been as high as 2.44 and as low as 1.24, with a median of 1.82, over the past year.
Finally, our model also underscores that AEO has a P/CF ratio of 8.99. 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 12.91. Over the past year, AEO's P/CF has been as high as 9.94 and as low as 6.01, with a median of 7.80.
The Gap (GPS - Free Report) may be another strong Retail - Apparel and Shoes stock to add to your shortlist. GPS is a # 1 (Strong Buy) stock with a Value grade of A.
The Gap is currently trading with a Forward P/E ratio of 17.37 while its PEG ratio sits at 1.45. Both of the company's metrics compare favorably to its industry's average P/E of 13.15 and average PEG ratio of 0.73.
Over the past year, GPS's P/E has been as high as 23.58, as low as -63.95, with a median of 14.63; its PEG ratio has been as high as 1.97, as low as -5.33, with a median of 0.95 during the same time period.
The Gap sports a P/B ratio of 2.93 as well; this compares to its industry's price-to-book ratio of 3.83. In the past 52 weeks, GPS's P/B has been as high as 3.31, as low as 1.25, with a median of 1.73.
Value investors will likely look at more than just these metrics, but the above data helps show that American Eagle Outfitters and The Gap are likely undervalued currently. And when considering the strength of its earnings outlook, AEO and GPS sticks out as one of the market's strongest value stocks.