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URBN vs. GOOS: Which Stock Should Value Investors Buy Now?

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Investors interested in Retail - Apparel and Shoes stocks are likely familiar with Urban Outfitters (URBN) and Canada Goose (GOOS). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Urban Outfitters and Canada Goose are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that URBN has an improving earnings outlook. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

URBN currently has a forward P/E ratio of 9.20, while GOOS has a forward P/E of 45.33. We also note that URBN has a PEG ratio of 0.51. 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. GOOS currently has a PEG ratio of 1.68.

Another notable valuation metric for URBN is its P/B ratio of 1.80. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, GOOS has a P/B of 9.76.

These metrics, and several others, help URBN earn a Value grade of B, while GOOS has been given a Value grade of D.

URBN sticks out from GOOS in both our Zacks Rank and Style Scores models, so value investors will likely feel that URBN is the better option right now.


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Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report
 
Canada Goose Holdings Inc. (GOOS) : Free Stock Analysis Report
 
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