Over the past three months, American Eagle Outfitters Inc (AEO, Financial) has seen a significant surge in its stock price, with a gain of 36.43%. The stock's current price stands at $17.42, reflecting a market cap of $3.44 billion. This impressive performance is further highlighted by the stock's price change over the past week, which shows a gain of 4.37%. According to GuruFocus.com's GF Value, the stock is currently fairly valued at $16.93, a notable shift from three months ago when it was significantly undervalued at $17.02.
Unpacking American Eagle Outfitters Inc
American Eagle Outfitters Inc is a retail - cyclical company that operates in two segments: American Eagle and Aerie. The company is a renowned apparel and accessory retailer with company stores in the U.S., Canada, Mexico, and Hong Kong. It also has a robust online business that ships worldwide. The majority of its revenue is generated from its primary brand, American Eagle, which offers an assortment of specialty apparel and accessories for women and men. The vast majority of its revenue comes from the United States. 
Profitability Analysis
With a Profitability Rank of 7/10, American Eagle Outfitters Inc demonstrates strong profitability. The company's Operating Margin of 6.43% is better than 65.32% of companies in the industry. Its ROE of 13.13% and ROA of 5.79% are also better than the majority of companies in the industry. The company's ROIC of 7.53% indicates that it generates cash flow effectively relative to the capital it has invested in its business. Over the past 10 years, the company has been profitable for 9 years, which is better than 71.02% of companies. 
Growth Prospects
Despite its strong profitability, American Eagle Outfitters Inc has a low Growth Rank of 2/10. The company's 3-year and 5-year revenue growth rates per share stand at -1.20% and 2.30% respectively. However, the company's future 3-year to 5-year total revenue growth rate estimate is 3.66%, which is better than 38.17% of companies. The company's 3-year EPS without NRI growth rate is -17.00%. 
Top Holders of the Stock
The top three holders of American Eagle Outfitters Inc's stock are Ken Fisher (Trades, Portfolio), who holds 1.11% of the shares, Lee Ainslie (Trades, Portfolio), who holds 0.15% of the shares, and Jeremy Grantham (Trades, Portfolio), who holds 0.12% of the shares.
Competitive Landscape
American Eagle Outfitters Inc operates in a competitive industry, with main competitors being Urban Outfitters Inc (URBN, Financial) with a market cap of $3.04 billion, Abercrombie & Fitch Co (ANF, Financial) with a market cap of $3.12 billion, and Carter's Inc (CRI, Financial) with a market cap of $2.47 billion.
Conclusion
In conclusion, American Eagle Outfitters Inc's stock has performed impressively over the past three months, with a significant surge of 36.43%. The company's strong profitability, as indicated by its Profitability Rank of 7/10 and impressive operating margin, ROE, ROA, and ROIC, contributes to its robust performance. However, its low Growth Rank of 2/10 suggests that the company's growth prospects may be limited. Despite this, the company's future 3-year to 5-year total revenue growth rate estimate is promising. Given these factors, investors should keep a close eye on American Eagle Outfitters Inc's stock performance in the coming months.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
