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Category: American Eagle Outfitters (AEO) and Buckle (BKE)
Date: 25 November 2020 Stock price of American Eagle Outfitters (AEO): $17.79 Stock price of Buckle (BKE): $28.13 In our continued stock face of series we compare the stocks of two on trend clothing and apparel firms, American Eagle Outfitters (AEO) and Buckle (BKE). 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 Lowe's wins on the Price/Stockholders equity per share metric. Lowe's (LOW) wins when it comes to the cash as percentage of stock price. Lowe's (LOW) also has the stronger cash position with their cash as percentage of total assets being higher than that of The Home Depot (HD). "
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 Buckle (BKE)
Offering a unique mix of high-quality, on-trend apparel, accessories, and footwear, Buckle caters to fashion-conscious young men and women. Known as a denim destination, each store carries a wide selection of fits, styles, and finishes from leading denim brands, including the Company’s exclusive brand, BKE. Headquartered in Kearney, Nebraska, Buckle currently operates 449 retail stores in 42 states. As of the end of the fiscal quarter, it operated 449 stores in 42 states compared with 453 stores in 43 states at the end of the third quarter of fiscal 2018.
Overview of the latest quarterly earnings report of Buckle
Our latest stock valuation of Buckle (BKE): $29.30
Overview of the latest quarterly earnings report of Buckle
- Net sales: $251 million (up from $224 million for the same quarter of the prior year)
- Net sales increased by 12% over the last 12 months
- Cost of sales : $134.1 million (up from $130.6 million for the same quarter of the prior year)
- Cost of sales expenses increased by 2.7% over the last 12 months
- So margin gain for Buckle as revenue increased at a rate a lot faster than their cost of sales which is good for margins and profits
- Net income: $41.6 million (up from $25.9 million for the same quarter of the prior year)
- Diluted earnings per share: $0.85 (up from $0.53 for the same quarter of the prior year)
- PE ratio of Buckle: 12.4
- Shares outstanding : 48.9 million (up from 48.8 million for the same quarter of the prior year)
- Cash and cash equivalents: $331.9 million
- Cash and cash equivalents per share: $6.78
- Cash and cash equivalents makes up 24.4% of Buckle's market capital
- Cash and cash equivalents makes up 36.9% of Buckle's total assets
- Cash and cash equivalents per share: $6.78
- Merchandise inventories: $118.7 million
- Merchandise inventories makes up 13.2% of Buckle's total assets
- Stockholders equity in Buckle: $442.4 million
- Stockholders equity per Buckle stock: $9.04
- Buckle 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 Buckle stock: $9.04
Our latest stock valuation of Buckle (BKE): $29.30
American Eagle Outfitters (AEO) vs Buckle (BKE) 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 American Eagle Outfitters has easily outperformed that of Buckle (BKE).
- American Eagle Outfitters: 17.7%
- Buckle (BKE): -4.93%
Over the 5 year period the stock of American Eagle Outfitters has easily outperformed that of Buckle (BKE).
Financial fundamentals comparison between American Eagle (AEO) and Buckle (BKE)
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 a draw between Buckle (BKE) and American Eagle Outfitters (AEO). 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 for these firms 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.
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 Buckle comes off as the winner, while it is another draw when it comes to the Cash as percentage of the total assets. 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 Buckle (BKE): 3.07
Based on this metric it is a draw between Buckle (BKE) and American Eagle Outfitters (AEO). 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 for these firms 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.
Next up cash as percentage of stock price:
- Cash as percentage of stock price for American Eagle Outfitters (HD): 21.1%
- Cash as percentage of stock price for Buckle (BKE) : 24.4%
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 Buckle (BKE): 36.9%
So based on the cash position of these two firms when it comes to cash as percentage of stock price Buckle comes off as the winner, while it is another draw when it comes to the Cash as percentage of the total assets. 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 (EAO): 13.9
- PE ratio for Buckle (BKE) : 12.4
Price relative to stock valuation
Looking at all the fundamental metrics above Buckle wins on the Price/Stockholders equity per share metric. Buckle (BKE) wins when it comes to the cash as percentage of stock price. Buckle (BKE) also has the stronger cash position with their cash as percentage of total assets being higher than that of American Eagle Outfitters (AEO). When looking at the PE ratio it is Buckle once again that wins as it has the lower PE ratio. Buckle (BKE) is also trading at closer to our latest stock valuation of the group (with it trading at 2.7% above 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 (EAO) vs Buckle (BKE) we rate the stock of Buckle (BKE) as the very clear winner.
- Price/Stock Valuation ratio for American Eagle Outfitters (EAO): 1.32
- Price/Stock Valuation ratio for Buckle (BKE): 1.027
Looking at all the fundamental metrics above Buckle wins on the Price/Stockholders equity per share metric. Buckle (BKE) wins when it comes to the cash as percentage of stock price. Buckle (BKE) also has the stronger cash position with their cash as percentage of total assets being higher than that of American Eagle Outfitters (AEO). When looking at the PE ratio it is Buckle once again that wins as it has the lower PE ratio. Buckle (BKE) is also trading at closer to our latest stock valuation of the group (with it trading at 2.7% above 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 (EAO) vs Buckle (BKE) we rate the stock of Buckle (BKE) as the very clear winner.