Contrasting American Eagle Outfitters (NYSE:AEO) & a.k.a. Brands (NYSE:AKA)

American Eagle Outfitters (NYSE:AEO) and a.k.a. Brands (NYSE:AKA) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.

Analyst Ratings

This is a summary of recent ratings and target prices for American Eagle Outfitters and a.k.a. Brands, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Eagle Outfitters	2	11	1	1	2.07
a.k.a. Brands	1	2	1	0	2.00

American Eagle Outfitters presently has a consensus price target of $21.45, indicating a potential downside of 19.65%. a.k.a. Brands has a consensus price target of $18.33, indicating a potential upside of 62.11%. Given a.k.a. Brands’ higher possible upside, analysts plainly believe a.k.a. Brands is more favorable than American Eagle Outfitters.

Risk and Volatility

American Eagle Outfitters has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, a.k.a. Brands has a beta of 1.62, meaning that its share price is 62% more volatile than the S&P 500.

Earnings and Valuation

This table compares American Eagle Outfitters and a.k.a. Brands”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Eagle Outfitters	$5.33 billion	0.85	$329.38 million	$1.16	23.02
a.k.a. Brands	$574.70 million	0.21	-$25.99 million	($2.46)	-4.60

American Eagle Outfitters has higher revenue and earnings than a.k.a. Brands. a.k.a. Brands 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.

Institutional & Insider Ownership

97.3% of American Eagle Outfitters shares are held by institutional investors. Comparatively, 55.4% of a.k.a. Brands shares are held by institutional investors. 8.7% of American Eagle Outfitters shares are held by company insiders. Comparatively, 17.6% of a.k.a. Brands shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares American Eagle Outfitters and a.k.a. Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Eagle Outfitters	3.90%	13.82%	5.59%
a.k.a. Brands	-4.42%	-23.20%	-6.56%

Summary

American Eagle Outfitters beats a.k.a. Brands on 11 of the 14 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 a.k.a. Brands

a.k.a. Brands Holding Corp. operates a portfolio of online fashion brands in the United States, Australia, and internationally. The company offers streetwear apparel, dresses, tops, bottoms, shoes, headwear, and accessories through its online stores under the Princess Polly, Petal & Pup, Culture Kings, and mnml brands. It also operates physical stores under the Culture Kings brand. The company was founded in 2018 and is headquartered in San Francisco, California.