American Eagle Outfitters, Inc. (AEO) vs The Gap, Inc. (GAP)

American Eagle Outfitters, Inc. and The Gap, Inc. are both Apparel Retail companies. The Gap, Inc. is the larger, with a market value of $7.7B against $2.7B — 2.8× the size. The Gap, Inc. trades at the lower P/E: 6.4× against 8.3×. American Eagle Outfitters, Inc. grew revenue faster over the last twelve months: 9.16% against 1.05%. The Gap, Inc. has the higher net margin (8.14% vs 5.86%) and the higher return on invested capital (35.6% vs 16.8%). Both pay a dividend; The Gap, Inc. yields more (2.94% vs 2.01%). Across the 22 metrics below, The Gap, Inc. leads on 14 and American Eagle Outfitters, Inc. on 8.

Valuation

Metric AEO GAP Apparel Retail median
P/E 8.29 6.38 12.56
P/S 0.48 0.51 0.35
P/B 1.57 1.96 1.57
Price to free cash flow 8.06 8.09 11.15
EV/EBITDA 4.00 3.36 7.42
EV/Sales 0.47 0.48 0.51
Earnings yield 12.06% 15.67% 5.76%
Free cash flow yield 12.40% 12.35% 4.34%

Profitability

Metric AEO GAP Apparel Retail median
Gross margin 40.54% 43.26% 41.90%
Operating margin 7.79% 10.99% 2.50%
Net margin 5.86% 8.14% 3.41%
Free cash flow margin 5.97% 6.24% 2.86%
Return on equity 20.37% 33.78% 7.71%
Return on assets 8.08% 9.98% 2.85%
Return on invested capital 16.77% 35.57% 6.41%

Growth

Metric AEO GAP Apparel Retail median
Revenue growth (TTM) 9.16% 1.05% 4.14%
EPS growth (last fiscal year) (35.12%) (3.18%) —
Revenue growth, 5-year CAGR 8.09% 2.17% 5.92%
Net income growth, 5-year CAGR 0.00% 0.00% 0.00%

Health

Metric AEO GAP Apparel Retail median
Debt to equity 0.03 0.38 0.01
Current ratio 1.59 1.82 1.54
Net debt to EBITDA (0.53) (0.94) (0.29)

Dividend

Metric AEO GAP Apparel Retail median
Dividend yield 2.01% 2.94% 2.94%
Payout ratio 0.19 2.07 0.00

Size

Metric AEO GAP Apparel Retail median
Market cap 2.69b 7.66b 358.41m

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