Are Investors Undervaluing Urban Outfitters (URBN) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Urban Outfitters (URBN). URBN is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 10.48 right now. For comparison, its industry sports an average P/E of 14.11. Over the past year, URBN's Forward P/E has been as high as 16.59 and as low as 5.92, with a median of 10.74.
We also note that URBN holds a PEG ratio of 0.58. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. URBN's industry has an average PEG of 0.82 right now. Over the last 12 months, URBN's PEG has been as high as 0.92 and as low as 0.33, with a median of 0.60.
Another notable valuation metric for URBN is its P/B ratio of 1.37. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.63. Over the past year, URBN's P/B has been as high as 1.57 and as low as 1.01, with a median of 1.28.
Investors could also keep in mind Vera Bradley (VRA), an Retail - Apparel and Shoes stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Vera Bradley sports a P/B ratio of 0.74 as well; this compares to its industry's price-to-book ratio of 2.63. In the past 52 weeks, VRA's P/B has been as high as 0.78, as low as 0.33, with a median of 0.52.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Urban Outfitters and Vera Bradley are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, URBN and VRA feels like a great value stock at the moment.
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Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report
Vera Bradley, Inc. (VRA) : Free Stock Analysis Report
