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Should Value Investors Buy American Eagle Outfitters (AEO) Stock?
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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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is American Eagle Outfitters (AEO - Free Report) . AEO is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 15.05 right now. For comparison, its industry sports an average P/E of 16.89. AEO's Forward P/E has been as high as 18.22 and as low as 6.05, with a median of 9.56, all within the past year.
Investors will also notice that AEO has a PEG ratio of 0.84. 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 PEG compares to its industry's average PEG of 1.25. Within the past year, AEO's PEG has been as high as 1.05 and as low as 0.65, with a median of 0.89.
Another notable valuation metric for AEO is its P/B ratio of 2.12. 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 company's current P/B looks solid when compared to its industry's average P/B of 6.31. AEO's P/B has been as high as 2.54 and as low as 1.05, with a median of 1.48, over the past year.
Finally, investors will want to recognize that AEO has a P/CF ratio of 7.59. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. AEO's P/CF compares to its industry's average P/CF of 16.01. AEO's P/CF has been as high as 9.27 and as low as 3.36, with a median of 5.12, all within the past year.
These are only a few of the key metrics included in American Eagle Outfitters's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AEO looks like an impressive value stock at the moment.
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Should Value Investors Buy American Eagle Outfitters (AEO) Stock?
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is American Eagle Outfitters (AEO - Free Report) . AEO is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 15.05 right now. For comparison, its industry sports an average P/E of 16.89. AEO's Forward P/E has been as high as 18.22 and as low as 6.05, with a median of 9.56, all within the past year.
Investors will also notice that AEO has a PEG ratio of 0.84. 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 PEG compares to its industry's average PEG of 1.25. Within the past year, AEO's PEG has been as high as 1.05 and as low as 0.65, with a median of 0.89.
Another notable valuation metric for AEO is its P/B ratio of 2.12. 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 company's current P/B looks solid when compared to its industry's average P/B of 6.31. AEO's P/B has been as high as 2.54 and as low as 1.05, with a median of 1.48, over the past year.
Finally, investors will want to recognize that AEO has a P/CF ratio of 7.59. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. AEO's P/CF compares to its industry's average P/CF of 16.01. AEO's P/CF has been as high as 9.27 and as low as 3.36, with a median of 5.12, all within the past year.
These are only a few of the key metrics included in American Eagle Outfitters's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AEO looks like an impressive value stock at the moment.