Is American Eagle Outfitters, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for American Eagle Outfitters, Inc. has moved from attractive to fair, indicating a shift in its perceived investment quality. The company appears to be fairly valued based on its current metrics, with a P/E ratio of 11, an EV to EBITDA of 5.65, and a Price to Book Value of 1.75. In comparison to peers, Gap, Inc. has a P/E of 10.22 and Urban Outfitters, Inc. boasts a P/E of 13.77, suggesting that American Eagle is positioned competitively within the industry.
Despite the fair valuation, American Eagle has faced significant stock performance challenges, with a year-to-date return of -10.32% compared to the S&P 500's positive return of 13.30%. Over the past year, the stock has declined by 30.47%, while the S&P 500 has gained 14.08%, highlighting the company's struggles relative to broader market performance.