Hollywood starlet Sydney Sweeney has done plenty of scene-stealing in Euphoria and The White Lotus but her latest breakout performance may be on Wall Street. American Eagle Outfitters (AEO) saw its stock surge after unveiling a new denim campaign featuring Sweeney, whose “great jeans/genes” tagline sent social media into overdrive and meme-stock traders into a frenzy.
For a struggling retailer down more than 35% year-to-date before the ad campaign, the timing could not have been better. Shares have bounced up and down and up again and now stand some 25% above the close the day before the ad campaign launched on July 23, with some of that advance coming after President Donald Trump praised Sweeney’s “hottest” ad on Truth Social. Suddenly a faded mall brand had become the latest member of the meme-stock Hall of Fame alongside GameStop, AMC and a rotating cast of short-squeeze candidates.
But is American Eagle just another pump-and-dump for Reddit’s WallStreetBets crowd or could the Sweeney halo actually highlight a stock worth owning?
A Meme Among Memes
Consider mountable camera maker GoPro (GPRO) which shows the pitfalls of meme hype without fundamentals. Revenue shrank nearly 20% last year and is projected to fall another 15% in 2025 to $679 million. The company has not generated positive EBITDA since 2022 and 2025 EPS is pegged at –$0.13. With negative free cash flow, even its modest $290 million enterprise value looks like a shaky picture.
Krispy Kreme’s (DNUT) doughnuts need no introduction, but investors are paying a rich price, with the bottom line full of red sprinkles the last two quarters and losses of $0.25 projected this year, while more red ink is eyed in 2026. Throw in a hefty debt burden of $1.35 billion versus $21 million of cash on the balance sheet and it is hard to call the stock a sweet deal.
Why American Eagle Stands Out
American Eagle actually offers something unusual in meme-land: profitability. Revenue for fiscal 2026 (ended Jan 2026) is expected at more than $5.2 billion with EPS of $0.80, rising to $1.19 next year. With an enterprise value around $4 billion, shares trade at a single-digit EV/EBITDA multiple. Better yet the company pays a dividend that puts the yield near 4%, which is rare among meme darlings that usually burn cash instead of returning it to shareholders.
Another Value Fit: Abercrombie & Fitch
American Eagle competitor Abercrombie & Fitch (ANF) also looks like a solid choice for value-stock hunters. The company has staged a remarkable turnaround with fiscal ’26 revenue projected at more than $5 billion and EBITDA above $800 million. EPS is expected at $10.19 leaving the stock with a forward P/E under 10. Comparable sales are trending higher thanks to Hollister’s 22% surge and management continues to buy back stock aggressively, with $200 million authorized this year to shrink shares outstanding by 5%. Even with tariff pressures, ANF is producing mid-teens operating margins and strong cash flow.
Bottom Line
Sydney Sweeney may have sparked the latest round of meme mania but not all stocks in the basket are equal. GoPro and Krispy Kreme look stretched while American Eagle and Abercrombie & Fitch both combine recognizable brands with real earnings and attractive valuations. For investors with a value mindset, either retailer could fit the bill.
Sometimes great jeans really do come with great value!
For those who like what I have to say in this forum, further market analytics and stock picks can be found in my newsletter, The Prudent Speculator.