Should Value Investors Buy American Eagle Outfitters (AEO) Stock?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.One company value investors might notice is American Eagle Outfitters (AEO). AEO is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 15.05 right now. For comparison, its industry sports an average P/E of 16.89. AEO's Forward P/E has been as high as 18.22 and as low as 6.05, with a median of 9.56, all within the past year. Investors will also notice that AEO has a PEG ratio of 0.84. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AEO's PEG compares to its industry's average PEG of 1.25. Within the past year, AEO's PEG has been as high as 1.05 and as low as 0.65, with a median of 0.89. Another notable valuation metric for AEO is its P/B ratio of 2.12. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 6.31. AEO's P/B has been as high as 2.54 and as low as 1.05, with a median of 1.48, over the past year.Finally, investors will want to recognize that AEO has a P/CF ratio of 7.59. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. AEO's P/CF compares to its industry's average P/CF of 16.01. AEO's P/CF has been as high as 9.27 and as low as 3.36, with a median of 5.12, all within the past year.These are only a few of the key metrics included in American Eagle Outfitters's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AEO looks like an impressive value stock at the moment.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report American Eagle Outfitters, Inc. (AEO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks