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 value. The company appears to be fairly valued at this time, 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, peers such as Gap, Inc. have 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 its industry.
Despite the fair valuation, American Eagle has faced challenges, as evidenced by its recent stock performance. Over the past year, the stock has declined by 30.47%, while the S&P 500 has returned 14.08%, highlighting a significant underperformance relative to the broader market. This context reinforces the notion that while the company is currently fairly valued, its recent stock trajectory may warrant caution for potential investors.