Value
8.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.4 |
| P/S | 9.9 |
| EV/EBITDA | 8.6 |
| Fwd P/E | 9.7 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 7.1x
- ▸PEG: 0.49
- ▸Attractively valued
ANF · Why this verdict
Why Abercrombie & Fitch (ANF) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Abercrombie & Fitch combines an attractively priced forward multiple of 7.7x with a solid Piotroski score and three consecutive earnings beats, but the risk/reward at current prices is unfavorable, the stock is overbought near-term, and free cash flow covers only 57% of reported net income.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten consensus estimates in three of the last four quarters, with an in-line result in the oldest quarter followed by three straight beats of 10%, 3%, and 16% in more recent periods. The average positive surprise of roughly 7% indicates estimates are being set conservatively. Earnings | EPS surprise stays positive for 2 more consecutive quarters, with the average beat remaining above 5%. | →Stable |
| CounterThe most recent result — a 15.7% beat — may reflect easy comparisons or one-time factors; with overall growth low and a weak revenue growth score, the earnings beat streak may soften as the comparison base normalizes. | ||
At a forward multiple of 7.7x and a PEG of 0.53, the shares screen inexpensively relative to peers and carry roughly 22% upside to analyst consensus price targets. The peer-relative value rank is in the attractive range, suggesting the market is pricing in limited growth expectations. Valuation breakdown | The stock closes the discount to consensus target, trading above $96 within 12 months. | →Stable |
| CounterLow multiples in apparel retail often reflect cyclical demand sensitivity and structural risks from changing consumer preferences; the cheap multiple may be warranted rather than an opportunity if revenue growth remains near zero. | ||
Free cash flow covers only 57% of reported net income, meaning a meaningful portion of reported earnings is not converting into cash. This gap between accounting profit and cash generation introduces uncertainty about the true earnings power of the business. Quality breakdown | Free cash flow rises to cover more than 80% of net income for 2 consecutive quarters. | →Stable |
| CounterA 57% FCF-to-net-income ratio, while below ideal, does not indicate negative free cash flow; the business is still generating real cash, and the gap may narrow as working capital normalizes. | ||
RSI is at 74, placing the stock in overbought territory in the near term. Combined with an unfavorable risk/reward ratio — where downside to stop loss exceeds upside to the price target — the current setup does not support new position establishment at these levels. Momentum breakdown | RSI cools below 60 and the upside-to-downside ratio improves above 1.5-to-1 before the thesis becomes actionable. | →Stable |
| CounterMomentum is recovering from a death-cross setup with MACD improving and strong volume accumulation; overbought readings in a recovering trend can persist for several weeks before resolving, and a premature exit or non-entry misses the recovery leg. | ||
The company has beaten consensus estimates in three of the last four quarters, with an in-line result in the oldest quarter followed by three straight beats of 10%, 3%, and 16% in more recent periods. The average positive surprise of roughly 7% indicates estimates are being set conservatively.
→StableEarnings
- Expectation
- EPS surprise stays positive for 2 more consecutive quarters, with the average beat remaining above 5%.
CounterThe most recent result — a 15.7% beat — may reflect easy comparisons or one-time factors; with overall growth low and a weak revenue growth score, the earnings beat streak may soften as the comparison base normalizes.
At a forward multiple of 7.7x and a PEG of 0.53, the shares screen inexpensively relative to peers and carry roughly 22% upside to analyst consensus price targets. The peer-relative value rank is in the attractive range, suggesting the market is pricing in limited growth expectations.
→StableValuation breakdown
- Expectation
- The stock closes the discount to consensus target, trading above $96 within 12 months.
CounterLow multiples in apparel retail often reflect cyclical demand sensitivity and structural risks from changing consumer preferences; the cheap multiple may be warranted rather than an opportunity if revenue growth remains near zero.
Free cash flow covers only 57% of reported net income, meaning a meaningful portion of reported earnings is not converting into cash. This gap between accounting profit and cash generation introduces uncertainty about the true earnings power of the business.
→StableQuality breakdown
- Expectation
- Free cash flow rises to cover more than 80% of net income for 2 consecutive quarters.
CounterA 57% FCF-to-net-income ratio, while below ideal, does not indicate negative free cash flow; the business is still generating real cash, and the gap may narrow as working capital normalizes.
RSI is at 74, placing the stock in overbought territory in the near term. Combined with an unfavorable risk/reward ratio — where downside to stop loss exceeds upside to the price target — the current setup does not support new position establishment at these levels.
→StableMomentum breakdown
- Expectation
- RSI cools below 60 and the upside-to-downside ratio improves above 1.5-to-1 before the thesis becomes actionable.
CounterMomentum is recovering from a death-cross setup with MACD improving and strong volume accumulation; overbought readings in a recovering trend can persist for several weeks before resolving, and a premature exit or non-entry misses the recovery leg.
Per-dimension breakdown
Quality
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 8.5 |
| Gross margin | 8.3 |
| Op margin | 3.2 |
| Net margin | 4.7 |
| Current ratio | 5.3 |
| FCF quality | 4.5 |
| Moat | 6.4 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 39%
- ▸Earnings quality warning: 57% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
3.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.9 |
| EPS growth | 4.9 |
Momentum
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.3 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 2.7 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -2.8%/30d — confirmed downtrend
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.0 |
| Price target | 8.2 |
| erm sentiment | 4.4 |
- ▸Light analyst coverage (10.0) — signal dampened
- ▸Analyst upside: 25%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.1 |
| quality rank | 6.1 |
| growth rank | 0.8 |
- ▸Attractive P/E vs peers
Technical
2.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.4 |
| support resistance | 2.9 |
| 52w position | 3.3 |
Risk (lower is worse)
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.9 |
| days to cover | 8.6 |
| volatility | 0.5 |
| put call | 7.2 |
| implied vol | 3.4 |
| beta | 7.5 |
| debt equity | 5.3 |
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.0 |
- ▸Strong earnings: 3B/0M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:6.4>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:63d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.6<1.5@spot
Warning (1)
- DEATH_CROSS:momentum=6.4>=5.0 recovering
Reward-to-Risk
0.60
Upside
+9.0%
Downside
15.0%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 67
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $3.7B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.4>=5.5. Top dim: Value at 8.9; weakest: Technical at 2.9. No conviction either direction.
The strongest dimensions are Value at 8.9, Sentiment at 6.7, and Quality at 6.5; the weakest are Technical at 2.9, Growth at 3.9, and Peer rank at 4.8. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.60 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1At a forward multiple of 7.7x and a PEG of 0.53, the shares screen inexpensively relative to peers and carry roughly 22% upside to analyst consensus price targets. The peer-relative value rank is in the attractive range, suggesting the market is pricing in limited growth expectations.
Trip ifAnalyst consensus price target falls below $75, suggesting the market has materially lowered its view of fair value.
- P2The company has beaten consensus estimates in three of the last four quarters, with an in-line result in the oldest quarter followed by three straight beats of 10%, 3%, and 16% in more recent periods. The average positive surprise of roughly 7% indicates estimates are being set conservatively.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P3Free cash flow covers only 57% of reported net income, meaning a meaningful portion of reported earnings is not converting into cash. This gap between accounting profit and cash generation introduces uncertainty about the true earnings power of the business.
Trip ifFree cash flow rises above 80% of net income for 2 consecutive quarters.
- P4RSI is at 74, placing the stock in overbought territory in the near term. Combined with an unfavorable risk/reward ratio — where downside to stop loss exceeds upside to the price target — the current setup does not support new position establishment at these levels.
Trip ifRSI drops below 60 and the reward-to-risk ratio rises above 1.5-to-1.