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Category: American Eagle Outfitters (AEO) and Urban Outfitters (URBN)
Date: 30 November 2020 Stock price of American Eagle Outfitters (AEO): $18.50 Stock price of Urban Outfitters (URBN): $29.05 In our continued stock face of series we compare the stocks of two on trend clothing and apparel firms, American Eagle Outfitters (AEO) and Urban Outfitters (URBN). Which firm has provided the better returns in recent history and which firm is best set to outperform going forward.
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Looking at all the fundamental metrics above Urban Outfitters wins on the Price/Stockholders equity per share metric. Urban Outfitters (URBN) also wins when it comes to the cash as percentage of stock price. American Eagle Outfitters (AEO) has the stronger cash position with their cash as percentage of total assets being higher than that of Urban Outfitters (URBN). "
More About American Eagle Outfitters (AEO)
American Eagle Outfitters, Inc. (NYSE: AEO) is a leading global specialty retailer offering high-quality, on-trend clothing, accessories and personal care products at affordable prices under its American Eagle Outfitters® and Aerie® brands. The company operates more than 1,000 stores in the United States, Canada, Mexico, China and Hong Kong, and ships to 81 countries worldwide through its websites. American Eagle Outfitters and Aerie merchandise also is available at more than 200 international locations operated by licensees in 25 countries
Overview of the latest quarterly earnings report of American Eagle Outfitters
Our latest stock valuation of American Eagle Outfitters: $20.10
Overview of the latest quarterly earnings report of American Eagle Outfitters
- Net sales: $1.031 billion (down from $1.066 billion for the same quarter of the prior year)
- Net sales decreased by -3.3% over the last 12 months
- Cost of sales : $616.840 million (down from $659.350 million for the same quarter of the prior year)
- Cost of sales expenses decreased by -6.4% over the last 12 months
- Some margin gain for American Eagle Outfitters as their net sales decreased at a slower rate than their cost of sales
- Net income: $58.1 million (down from $80.7million for the same quarter of the prior year)
- Diluted earnings per share: $0.32 (down from $0.48 for the same quarter of the prior year)
- PE ratio of American Eagle Outfitters: 13.9
- Shares outstanding : 184.397 million (up from 168.693 million for the same quarter of the prior year)
- Cash and cash equivalents: $692.4 million
- Cash and cash equivalents per share: $3.75
- Cash and cash equivalents makes up 21.1% of American Eagle Outfitters market capital
- Cash and cash equivalents makes up 36.9% of American Eagle Outfitters total assets
- Cash and cash equivalents per share: $3.75
- Merchandise inventories: $559.9 million
- Merchandise inventories makes up 16% of American Eagle Outfitters total assets
- Stockholders equity in American Eagle Outfitters: $1.068 billion
- Stockholders equity per American Eagle Outfitters stock: $5.79
- American Eagle Outfitters is trading at 3.07 times its stockholders equity per share which is just within the expected range of between 2 and 4 times that most firms tend to trade at
- Stockholders equity per American Eagle Outfitters stock: $5.79
Our latest stock valuation of American Eagle Outfitters: $20.10
More About Urban Outfitters (URBN)
Urban Outfitters, Inc., offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands comprised of 249 Urban Outfitters stores in the United States, Canada and Europe and websites; 231 Anthropologie Group stores in the United States, Canada and Europe, catalogs and websites; 143 Free People stores in the United States, Canada and Europe, catalogs and websites, 11 Food and Beverage restaurants, 5 Urban Outfitters franchisee-owned stores, 1 Anthropologie Group franchisee-owned store and 1 Free People franchisee-owned store, as of October 31, 2019. Free People, Anthropologie Group and Urban Outfitters wholesale sell their products through approximately 2,200 department and specialty stores worldwide, digital businesses and the Company’s Retail segment.
Overview of the latest quarterly earnings report of Urban Outfitters
Our latest stock valuation of Urban Outfitters: $29.70
Overview of the latest quarterly earnings report of Urban Outfitters
- Net sales: $969.6 million (down from $987.4 million for the same quarter of the previous year)
- Net sales decreased by -1.8% over the last 12 months
- Cost of sales: $646.6 million (down from $666.3 million for the same quarter of the previous year)
- Cost of sales decreased by -2.9% over the last 12 months
- Some margin gain for Urban Outfitters as revenues declined at a slower rate than their cost of sales
- Net income: $76.7 million (up from $55.6 million for the same quarter of the previous year)
- Diluted earnings per share: $0.78 (up from $0.56 for the same quarter of the previous year)
- PE ratio of Urban Outfitters: 9.3
- Diluted shares in issue: 97.910 million (down from 105.340 million for the same quarter of the previous year)
- Cash and cash equivalents: $588.740 million
- Cash and equivalents per share: $6.01
- Cash and equivalents makes up 36.4% of Urban Outfitters market capital
- Cash and equivalents makes up 17.5% of Urban Outfitters total assets
- Cash and equivalents per share: $6.01
- Inventories of Urban Outfitters: $335.640 million
- Inventories makes up 10% of Urban Outfitters total assets
- Stockholders equity in Urban Outfitters: $1.298 billion
- Stockholders equity per Urban Outfitters stock: $13.25
- So Urban Outfitters is trading at 1.24 times its stockholders equity per share which is just outside the expected range of between 2 and 4 times that most firms then to trade at
- Stockholders equity per Urban Outfitters stock: $13.25
Our latest stock valuation of Urban Outfitters: $29.70
American Eagle Outfitters (AEO) vs Urban Outfitters (URBN) stock price over the last 5 years
The image below shows the stock price performance of American Eagle Outfitters (AEO) vs Buckle (BKE) stock price over the last 5 years. And over the 5 year period the stock price trends of the two clothing and apparel groups have been fairly similar. The summary below shows the stock price returns provided by each over the last 5 years, sorted from best to worst performer:
Over the 5 year period the stock of Urban Outfitters (URBN) has easily outperformed that of American Eagle Outfitters (AEO).
- Urban Outfitters : 25.7%
- American Eagle Outfitters: 19.6%
Over the 5 year period the stock of Urban Outfitters (URBN) has easily outperformed that of American Eagle Outfitters (AEO).
Financial fundamentals comparison between American Eagle (AEO) and Urban (URBN)
So let's take a look at the fundamentals and the valuation metrics in order to determine which of these two firms offers the most value at their current stock price.
One of our key metrics is the Price to Stockholders equity per share ratio. When looking at this we find the following:
Based on this metric it is Urban Outfitters (URBN) that takes the win. So what is the stockholders equity per share you ask? Well if a firm sells all assets, pays all its debts ad distributes the rest to its stockholders, the stockholders equity per share shows what each stockholders will get. Thus the higher this ratio the less you will get out per stock compared to what you are paying for it. So American Eagle that is trading at 3.07 times it stockholders equity you will only get 32.5% of its current stock price out of they were to sell all assets, pay all debt and distribute the rest to stockholders. In the case of Urban Outfitters you would get 45.4% of its current stock price out
Next up cash as percentage of stock price:
Next up lets take a look at the percentage cash on the balance sheet makes up of each group's total assets:
So based on the cash position of these two firms when it comes to cash as percentage of stock price Urban Outfitters comes off as the winner, yet when it comes to the Cash as percentage of the total assets it is American Eagle Outfitters that comes out as the winner.
Next lets take a look at the most overused financial ratio around. The Price to Earnings ratio.
Next up the PE ratio of the stocks:
One of our key metrics is the Price to Stockholders equity per share ratio. When looking at this we find the following:
- Price/Stockholders equity per share for American Eagle Outfitters (AEO): 3.07
- Price/Stockholders equity per share for Urban Outfitters (URBN): 2.2
Based on this metric it is Urban Outfitters (URBN) that takes the win. So what is the stockholders equity per share you ask? Well if a firm sells all assets, pays all its debts ad distributes the rest to its stockholders, the stockholders equity per share shows what each stockholders will get. Thus the higher this ratio the less you will get out per stock compared to what you are paying for it. So American Eagle that is trading at 3.07 times it stockholders equity you will only get 32.5% of its current stock price out of they were to sell all assets, pay all debt and distribute the rest to stockholders. In the case of Urban Outfitters you would get 45.4% of its current stock price out
Next up cash as percentage of stock price:
- Cash as percentage of stock price for American Eagle Outfitters (AEO): 21.1%
- Cash as percentage of stock price for Urban Outfitters (URBN) : 36.4%
Next up lets take a look at the percentage cash on the balance sheet makes up of each group's total assets:
- Cash as percentage of stock price for American Eagle Outfitters (AEO) : 36.9%
- Cash as percentage of stock price for Urban Outfitters (URBN): 17.5%
So based on the cash position of these two firms when it comes to cash as percentage of stock price Urban Outfitters comes off as the winner, yet when it comes to the Cash as percentage of the total assets it is American Eagle Outfitters that comes out as the winner.
Next lets take a look at the most overused financial ratio around. The Price to Earnings ratio.
Next up the PE ratio of the stocks:
- PE ratio for American Eagle Outfitters (AEO): 13.9
- PE ratio for Urban Outfitters (URBN) : 9.3
Price relative to stock valuation
Looking at all the fundamental metrics above Urban Outfitters wins on the Price/Stockholders equity per share metric. Urban Outfitters (URBN) also wins when it comes to the cash as percentage of stock price. American Eagle Outfitters (AEO) has the stronger cash position with their cash as percentage of total assets being higher than that of Urban Outfitters (URBN).
When looking at the PE ratio it is Urban Outfitters once again that wins as it has the lower PE ratio. Urban Outfitters (URBN) is also trading at closer to our latest stock valuation of the group (with it trading at 2.1% discount to our target price) , while American Eagle Outfitters is trading at about 32% above our latest stock valuation (target price) for the group.
Therefore all things considered in the battle between American Eagle Outfitters (AEO) vs Urban Outfitters (URBN) we rate the stock of Urban Outfitters (URBN) as the winner in the battle of the outfitters
- Price/Stock Valuation ratio for American Eagle Outfitters (AEO): 1.32
- Price/Stock Valuation ratio for Urban Outfitters (URBN) 0.978
Looking at all the fundamental metrics above Urban Outfitters wins on the Price/Stockholders equity per share metric. Urban Outfitters (URBN) also wins when it comes to the cash as percentage of stock price. American Eagle Outfitters (AEO) has the stronger cash position with their cash as percentage of total assets being higher than that of Urban Outfitters (URBN).
When looking at the PE ratio it is Urban Outfitters once again that wins as it has the lower PE ratio. Urban Outfitters (URBN) is also trading at closer to our latest stock valuation of the group (with it trading at 2.1% discount to our target price) , while American Eagle Outfitters is trading at about 32% above our latest stock valuation (target price) for the group.
Therefore all things considered in the battle between American Eagle Outfitters (AEO) vs Urban Outfitters (URBN) we rate the stock of Urban Outfitters (URBN) as the winner in the battle of the outfitters