American Eagle Outfitters (NYSE:AEO – Get Free Report) and Stitch Fix (NASDAQ:SFIX – Get Free Report) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, profitability, dividends, analyst recommendations, earnings, institutional ownership and valuation.
Profitability
This table compares American Eagle Outfitters and Stitch Fix’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Eagle Outfitters | 5.01% | 20.95% | 8.34% |
| Stitch Fix | -1.89% | -12.23% | -4.99% |
Analyst Ratings
This is a summary of current ratings and target prices for American Eagle Outfitters and Stitch Fix, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Eagle Outfitters | 1 | 13 | 1 | 0 | 2.00 |
| Stitch Fix | 1 | 4 | 1 | 0 | 2.00 |
Insider & Institutional Ownership
97.3% of American Eagle Outfitters shares are held by institutional investors. Comparatively, 71.0% of Stitch Fix shares are held by institutional investors. 9.0% of American Eagle Outfitters shares are held by insiders. Comparatively, 16.1% of Stitch Fix shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Valuation and Earnings
This table compares American Eagle Outfitters and Stitch Fix”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Eagle Outfitters | $5.50 billion | 0.49 | $191.98 million | $1.62 | 9.90 |
| Stitch Fix | $1.27 billion | 0.38 | -$28.74 million | ($0.13) | -27.08 |
American Eagle Outfitters has higher revenue and earnings than Stitch Fix. Stitch Fix is trading at a lower price-to-earnings ratio than American Eagle Outfitters, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
American Eagle Outfitters has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500. Comparatively, Stitch Fix has a beta of 2.31, suggesting that its stock price is 131% more volatile than the S&P 500.
Summary
American Eagle Outfitters beats Stitch Fix on 9 of the 12 factors compared between the two stocks.
About American Eagle Outfitters
American Eagle Outfitters, Inc. operates as a multi-brand specialty retailer in the United States and internationally. The company provides jeans, apparel and accessories, and personal care products for women and men under the American Eagle brand; and intimates, apparel, activewear, and swim collections under the Aerie and OFFLINE by Aerie brands. It also offers menswear products under the Todd Snyder New York brand; and fashion clothing and accessories under the Unsubscribed brand. The company sells its products through own and licensed retail stores; concession-based shops-within-shops; and digital channels, such as www.ae.com, www.aerie.com, www.toddsnyder.com, and www.unsubscribed.com. American Eagle Outfitters, Inc. was founded in 1977 and is headquartered in Pittsburgh, Pennsylvania.
About Stitch Fix
Stitch Fix, Inc. sells a range of apparel, shoes, and accessories for men, women, and kids through its website and mobile application in the United States and the United Kingdom. It offers denim, dresses, blouses, skirts, shoes, jewelry, and handbags under the Stitch Fix brand. The company was formerly known as rack habit inc. and changed its name to Stitch Fix, Inc. in October 2011. Stitch Fix, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.
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