Josh Arnold
Long/short equity

Aeropostale: Buyout Premium And Hope Means Shares Are 40% Overvalued

Shares of teen apparel retailer Aeropostale (ARO) have been beaten down of late and indeed for the past couple of years. The stock has been hit by some earnings missteps and requisite estimate revisions from analysts that inevitably follow. With shares trading near the bottom of their range for the past year, it begs the question whether ARO is a value stock or a value trap. This article will take a look at ARO to see what the market is pricing into shares and what analysts think will happen in order attain a fair value for ARO shares.

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To begin, it's instructive to see what the Street thinks about what ARO will earn in the...

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