NASDAQ:URBN appears to be flying under the radar despite its strong fundamentals.

Our stock screening tool has identified URBAN OUTFITTERS INC (NASDAQ:URBN) as an undervalued gem with strong fundamentals. NASDAQ:URBN boasts decent financial health and profitability while maintaining an attractive price point. We'll break it down further.

Understanding NASDAQ:URBN's Valuation Score

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:URBN was assigned a score of 7 for valuation:

• URBN's Price/Earnings ratio is a bit cheaper when compared to the industry. URBN is cheaper than 66.15% of the companies in the same industry.
• URBN is valuated rather cheaply when we compare the Price/Earnings ratio to 24.44, which is the current average of the S&P500 Index.
• Based on the Price/Forward Earnings ratio of 10.85, the valuation of URBN can be described as reasonable.
• Based on the Price/Forward Earnings ratio, URBN is valued a bit cheaper than 64.62% of the companies in the same industry.
• When comparing the Price/Forward Earnings ratio of URBN to the average of the S&P500 Index (19.53), we can say URBN is valued slightly cheaper.
• URBN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. URBN is cheaper than 68.46% of the companies in the same industry.
• URBN's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. URBN is cheaper than 66.92% of the companies in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The decent profitability rating of URBN may justify a higher PE ratio.
• A more expensive valuation may be justified as URBN's earnings are expected to grow with 26.23% in the coming years.

Exploring NASDAQ:URBN's Profitability

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:URBN scores a 6 out of 10:

• The Return On Assets of URBN (5.68%) is better than 66.92% of its industry peers.
• With a decent Return On Equity value of 11.47%, URBN is doing good in the industry, outperforming 63.08% of the companies in the same industry.
• The 3 year average ROIC (5.86%) for URBN is below the current ROIC(7.53%), indicating increased profibility in the last year.
• With a decent Profit Margin value of 4.56%, URBN is doing good in the industry, outperforming 71.54% of the companies in the same industry.
• In the last couple of years the Profit Margin of URBN has grown nicely.
• With a decent Operating Margin value of 6.16%, URBN is doing good in the industry, outperforming 68.46% of the companies in the same industry.

Health Analysis for NASDAQ:URBN

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:URBN has received a 7 out of 10:

• An Altman-Z score of 3.35 indicates that URBN is not in any danger for bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 3.35, URBN is in the better half of the industry, outperforming 72.31% of the companies in the same industry.
• There is no outstanding debt for URBN. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
• Looking at the Quick ratio, with a value of 0.81, URBN is in the better half of the industry, outperforming 60.77% of the companies in the same industry.

A Closer Look at Growth for NASDAQ:URBN

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:URBN has earned a 4 for growth:

• URBN is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.67% yearly.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Check the latest full fundamental report of URBN for a complete fundamental analysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.