One-glance verdict
Overvalued
$12.07 our estimate vs market $19.46
Wall Street consensus: $18.60 (54.1% higher than our fair-value estimate)
61% above our estimate, beyond the bull case
Fundamentals snapshot
American Eagle Outfitters, Inc.
AEO · NYQ · Consumer Cyclical · Apparel Retail
Current price
$19.46
52-week range
$14.10 - $28.46
Market cap
$3.26B
Balance sheet
Stretched
22.93x Strong cushion
Net debt $1.77B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 3.6% last year.
- Reward Free cash flow was positive in 10/10 years.
- Risk Insider ownership is only 8.9% (peer median: 33.8%).
- Risk Net debt grew 22.1% over 3 years.
What this company does
American Eagle Outfitters, Inc.
American Eagle Outfitters sells clothes and accessories for men and women, with popular brands like American Eagle for everyday wear and Aerie for loungewear and intimates. Their money mainly comes from selling these items in their own stores and online, and it matters because it shows how well they are doing at attracting shoppers and making sales.
How the company got here
American Eagle Outfitters started in 1977 as a small part of Silverman's Menswear, a family business. The founders, brothers Jerry and Mark Silverman, wanted to expand their offerings beyond traditional menswear and created American Eagle to focus on casual, leisure apparel, particularly for outdoor activities. Initially, the brand was known for its rugged, all-American style and strong emphasis on denim. Over time, the company evolved, with the Schottenstein family becoming a significant owner in the 1980s and taking full control in 1991. This led to a strategic shift towards private-label casual wear and a focus on value pricing, which proved successful and paved the way for the company's public offering in 1994. The brand gained significant popularity among young adults and teenagers, becoming a staple in mall culture throughout the late 1990s and early 2000s.
What it actually does
American Eagle Outfitters is a retailer that designs, markets, and sells casual clothing, accessories, and personal care products. They operate through a multi-brand strategy, with their primary focus on the American Eagle and Aerie brands. The company sells its products through a network of physical stores, its own e-commerce websites, and licensed international operations. Their offerings are generally targeted towards teenagers and young adults, emphasizing comfortable, trendy, and accessible fashion.
American Eagle
The American Eagle brand is the original and largest business of the company, primarily offering casual apparel for men and women. It's particularly known for its wide selection of jeans, which have been a core product since the brand's inception. Beyond denim, this segment includes a variety of tops, bottoms, outerwear, and accessories designed for everyday wear. The brand aims to provide trendy yet timeless pieces that resonate with its target demographic of young adults and high school students, maintaining a strong presence in malls and online.
Aerie
Aerie is a significant and rapidly growing brand within American Eagle Outfitters, focusing on intimates, apparel, activewear, and swim collections, primarily for women. Launched in 2006, Aerie has carved out a niche by emphasizing body positivity, inclusivity, and comfort. Its product range includes bras, bralettes, underwear, loungewear, activewear (under the OFFLINE by Aerie sub-brand), and swimwear. Aerie has become a major growth engine for the company, known for its authentic brand voice and strong connection with its customer base.
Todd Snyder
Todd Snyder is a premium menswear brand that American Eagle Outfitters acquired. This segment offers higher-end, contemporary fashion for men, including tailored clothing, sportswear, and accessories. While a smaller part of the overall business compared to American Eagle and Aerie, Todd Snyder allows the company to cater to a more discerning male customer seeking quality and sophisticated style. It operates through its own dedicated stores and online channels.
What management is betting on now
American Eagle Outfitters' current strategy, known as 'Powering Profitable Growth,' centers on amplifying its core brands, American Eagle and Aerie, and expanding into related categories. Management is focused on strengthening American Eagle's leadership in denim and growing its apparel offerings, while simultaneously fueling Aerie's expansion and accelerating the activewear opportunity with its OFFLINE brand. The company is also prioritizing financial discipline and operational efficiency to drive consistent profit growth and shareholder returns. This involves optimizing operations and leveraging technology to enhance the customer experience across both physical stores and digital channels.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q4
$-7.82M
FY2026 Q1
$318.88M
FY2026 Q2
$-116.28M
FY2026 Q3
$-43.15M
FY2026 Q4
$-2.51M
FY2027 Q2
$-126.64M
FY2027 Q3
$115.33M
Revenue
$1.38B
Net income
$134.08M
Diluted EPS
0.79
Operating cash flow
$181.55M
Free cash flow
$115.33M
Fetching…
Sources
Revenue
$1.20B
Net income
$23.52M
Diluted EPS
0.14
Operating cash flow
$-65.22M
Free cash flow
$-126.64M
Fetching…
Sources
Revenue
$1.36B
Net income
$91.34M
Diluted EPS
0.53
Operating cash flow
$67.15M
Free cash flow
$-2.51M
Fetching…
Sources
Revenue
$1.28B
Net income
$77.63M
Diluted EPS
0.45
Operating cash flow
$27.81M
Free cash flow
$-43.15M
Fetching…
Sources
Revenue
$1.09B
Net income
$-64.90M
Diluted EPS
-0.36
Operating cash flow
$-54.67M
Free cash flow
$-116.28M
Fetching…
Sources
Revenue
$1.60B
Net income
$104.34M
Diluted EPS
0.54
Operating cash flow
$383.75M
Free cash flow
$318.88M
Fetching…
Sources
Revenue
$1.29B
Net income
$80.02M
Diluted EPS
0.41
Operating cash flow
$52.91M
Free cash flow
$-7.82M
Fetching…
Sources
Is it cheap or expensive?
Fair value $12.07 vs current price $19.46
Wall Street consensus is the average analyst price target: $18.60 (54.1% higher than our fair-value estimate).
Our most-likely fair value is $12.07 a share — about 38.0% below today's price of $19.46, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Stretched
Net debt $1.8B. Interest coverage 22.9x.
Net debt
$1.77B
Interest coverage
22.93x
American Eagle Outfitters, Inc.'s profit covers its interest bill about 22.9 times over. which is weaker than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
AEO
BASELINE
American Eagle Outfitters, Inc.
Total debt $1.92B Interest coverage 22.93x This is the baseline the peer rows are being compared against.
Total debt $1.29B Interest coverage 294.38x +1,184% vs AEO Carries about 12.8x more debt cushion than AEO.
Total debt $1.21B Interest coverage 123.20x +437% vs AEO Carries about 5.4x more debt cushion than AEO.
What you should know
The case for and against AEO
3 Rewards
3 Risks
Rewards
-
Revenue grew 3.6% last year.
-
Free cash flow was positive in 10/10 years.
-
Trades at 10.0x P/E vs peer median 14.2x (29.7% cheaper).
Risks
-
Insider ownership is only 8.9% (peer median: 33.8%).
-
Net debt grew 22.1% over 3 years.
-
Forward P/E (10.1x) is higher than trailing (10.0x) - earnings are expected to drop.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
9.98x
Forward P/E
10.09x
P/B
1.85x
P/S
0.57x
EV/EBITDA
8.83x
PEG ratio
3.34x
Profitability
How much profit each dollar creates
Gross margin
37.4%
Operating margin
2.1%
Net margin
5.9%
ROE
20.0%
ROA
5.3%
Health
Liquidity and balance-sheet strength
Debt / equity
1.09x
Current ratio
1.59x
Quick ratio
0.47x
Total debt
$1.92B
Total cash
$147.95M
Growth
How the business has been compounding
Revenue TTM
$5.75B
Revenue 5Y CAGR
2.6%
EPS TTM
1.95
EPS 5Y CAGR
19.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$599.37M
Free CF TTM
$195.39M
FCF margin
3.4%
Dividend
Shareholder payout
Yield
2.6%
Payout ratio
25.6%
Last ex-div date
2026-10-09