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DCF Valuation
Base-case fair value
$32.94
Intrinsic $43.92 · 25% MOS
Current price: $15.80
Base-case summary
Our base-case DCF for American Eagle Outfitters Inc (AEO) projects 10 years of free cash flow growth at 20.0% for years 1–5 and 10.0% for years 6–10, anchored to 21.5% historical FCF growth, then applies a 2.5% perpetual growth rate and a 8.0% discount rate. Starting from $185M in trailing free cash flow, this produces an intrinsic value of $43.92 per share. A 25% safety margin gives a fair value of $32.94, suggesting the stock is currently 108% undervalued against the $15.80 market price.
See 3 scenarios side by side
Conservative, Base, and Optimistic fair values, plus the sensitivity matrix and FCF history. Free account.
Model inputs
TTM Free Cash Flow
$185M
Cash & equivalents
$103M
Total debt
$1.9B
Shares outstanding
172M