Is American Eagle Outfitters, Inc. overvalued or undervalued?

Jun 25 2025 08:14 AM IST
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As of March 7, 2024, American Eagle Outfitters, Inc. is considered overvalued with a valuation grade of expensive, reflected by a P/E ratio of 11 and poor performance, including a year-to-date return of -41.81%, compared to the S&P 500's gain of 2.44%.
As of 7 March 2024, the valuation grade for American Eagle Outfitters, Inc. has moved from attractive to expensive, indicating a shift in perception regarding its market value. The company is currently considered overvalued. Key ratios include a P/E ratio of 11, an EV to EBITDA of 5.65, and a Price to Book Value of 1.75, which suggest that the stock is trading at a premium compared to its earnings and book value.

In comparison to its peers, American Eagle's P/E ratio is lower than Tapestry, Inc. at 14.99 and Burlington Stores, Inc. at 32.69, yet higher than Gap, Inc. which stands at 9.10. The company's recent performance has been poor, with a year-to-date return of -41.81%, significantly underperforming the S&P 500's gain of 2.44% in the same period. This further reinforces the view that American Eagle Outfitters, Inc. is currently overvalued in the market.
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