Is Urban Outfitters (URBN) Stock Undervalued Right Now?

·2 min read

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Urban Outfitters (URBN) is a stock many investors are watching right now. URBN is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 10.18, which compares to its industry's average of 13.92. Over the last 12 months, URBN's Forward P/E has been as high as 16.59 and as low as 5.92, with a median of 10.62.

URBN is also sporting a PEG ratio of 0.57. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. URBN's industry has an average PEG of 0.84 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 0.59.

Another notable valuation metric for URBN is its P/B ratio of 1.32. Investors use the P/B ratio to look at a stock's market value versus 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 2.78. URBN's P/B has been as high as 1.57 and as low as 1.01, with a median of 1.28, over the past year.

These are just a handful of the figures considered in Urban Outfitters's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that URBN is an impressive value stock right now.

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