Yahoo Finance Is American Eagle Outfitters (AEO) Stock Undervalued Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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). AEO is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 14.15, while its industry has an average P/E of 19.21. AEO's Forward P/E has been as high as 18.06 and as low as 5.63, with a median of 9.40, all within the past year.
Investors should also note that AEO holds a PEG ratio of 1.22. 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 1.25. AEO's PEG has been as high as 1.56 and as low as 0.49, with a median of 0.83, all within the past year.
We should also highlight that AEO has a P/B ratio of 2. The P/B ratio pits a stock's market value against 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 3.21. Over the past year, AEO's P/B has been as high as 2.81 and as low as 1.20, with a median of 1.67.
If you're looking for another solid Retail - Apparel and Shoes value stock, take a look at Urban Outfitters (URBN). URBN is a # 2 (Buy) stock with a Value score of A.
Shares of Urban Outfitters are currently trading at a forward earnings multiple of 11.62 and a PEG ratio of 0.65 compared to its industry's P/E and PEG ratios of 19.21 and 1.25, respectively.
Over the last 12 months, URBN's P/E has been as high as 13.98, as low as 5.92, with a median of 9.52, and its PEG ratio has been as high as 0.78, as low as 0.33, with a median of 0.53.
Furthermore, Urban Outfitters holds a P/B ratio of 1.41 and its industry's price-to-book ratio is 3.21. URBN's P/B has been as high as 1.68, as low as 1.01, with a median of 1.28 over the past 12 months.
These are only a few of the key metrics included in American Eagle Outfitters and Urban Outfitters strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, AEO and URBN look like an impressive value stock at the moment.
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American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report
Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report
