American Eagle Outfitters Inc (AEO)vsThe Gap, Inc. (GAP)
AEO
American Eagle Outfitters Inc
$16.87
-2.03%
CONSUMER CYCLICAL · Cap: $2.92B
GAP
The Gap, Inc.
$24.69
+3.26%
CONSUMER CYCLICAL · Cap: $8.89B
Smart Verdict
WallStSmart Research — data-driven comparison
The Gap, Inc. generates 180% more annual revenue ($15.37B vs $5.50B). GAP leads profitability with a 5.3% profit margin vs 3.5%. GAP appears more attractively valued with a PEG of 1.39. GAP earns a higher WallStSmart Score of 55/100 (C).
AEO
Buy52
out of 100
Grade: C-
GAP
Buy55
out of 100
Grade: C
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
-221.7%
Fair Value
$7.41
Current Price
$16.87
$9.46 premium
Margin of Safety
-89.6%
Fair Value
$14.48
Current Price
$24.69
$10.21 premium
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Safe zone — low bankruptcy risk
Attractively priced relative to earnings
Reasonable price relative to book value
Attractively priced relative to earnings
Every $100 of equity generates 23 in profit
Reasonable price relative to book value
Areas to Watch
3.5% margin — thin
Weak financial health signals
Expensive relative to growth rate
Earnings declined 7.0%
2.1% revenue growth
5.3% margin — thin
Operating margin of 4.9%
Weak financial health signals
Comparative Analysis Report
WallStSmart ResearchBull Case : AEO
The strongest argument for AEO centers on Altman Z-Score, P/E Ratio, Price/Book.
Bull Case : GAP
The strongest argument for GAP centers on P/E Ratio, Return on Equity, Price/Book. PEG of 1.39 suggests the stock is reasonably priced for its growth.
Bear Case : AEO
The primary concerns for AEO are Profit Margin, Piotroski F-Score, PEG Ratio. Thin 3.5% margins leave little buffer for downturns.
Bear Case : GAP
The primary concerns for GAP are Revenue Growth, Profit Margin, Operating Margin.
Key Dynamics to Monitor
GAP carries more volatility with a beta of 2.24 — expect wider price swings.
AEO is growing revenue faster at 9.7% — sustainability is the question.
GAP generates stronger free cash flow (696M), providing more financial flexibility.
Monitor APPAREL RETAIL industry trends, competitive dynamics, and regulatory changes.
Bottom Line
GAP scores higher overall (55/100 vs 52/100). Both earn "Buy" and "Buy" ratings respectively — the choice depends on your investment horizon and risk tolerance.
This analysis is generated from publicly available financial data. Not financial advice.
American Eagle Outfitters Inc
CONSUMER CYCLICAL · APPAREL RETAIL · USA
American Eagle Outfitters, Inc. is a specialty retailer offering clothing, accessories, and personal care products under the American Eagle and Aerie brand names. The company is headquartered in Pittsburgh, Pennsylvania.
The Gap, Inc.
CONSUMER CYCLICAL · APPAREL RETAIL · USA
The Gap, Inc. is a leading global apparel retailer founded in 1969, recognized for its portfolio of well-known brands such as Gap, Banana Republic, Old Navy, and Athleta. Headquartered in San Francisco, California, the company operates in over 40 countries and is dedicated to providing quality, value, and style to a diverse customer base. Emphasizing digital transformation and sustainability, Gap is expanding its e-commerce capabilities while focusing on innovative product development and strategic growth initiatives to maintain its competitive edge in the ever-evolving retail sector.
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