NASDAQ:URBN is an undervalued gem with solid fundamentals.

Last update: Dec 28, 2023

Our stock screening tool has pinpointed URBAN OUTFITTERS INC (NASDAQ:URBN) as an undervalued stock option. NASDAQ:URBN retains a strong financial foundation and an attractive price tag. Let's delve into the specifics below.

How do we evaluate the Valuation for NASDAQ:URBN?

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NASDAQ:URBN has achieved a 7 out of 10:

Based on the Price/Earnings ratio, URBN is valued a bit cheaper than the industry average as 70.77% of the companies are valued more expensively.
URBN is valuated rather cheaply when we compare the Price/Earnings ratio to 26.17, which is the current average of the S&P500 Index.
URBN is valuated reasonably with a Price/Forward Earnings ratio of 10.51.
Based on the Price/Forward Earnings ratio, URBN is valued a bit cheaper than the industry average as 76.15% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 21.06. URBN is valued rather cheaply when compared to this.
URBN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. URBN is cheaper than 75.38% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, URBN is valued a bit cheaper than the industry average as 69.23% of the companies are valued more expensively.
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.
URBN's earnings are expected to grow with 27.58% in the coming years. This may justify a more expensive valuation.

Profitability Assessment of NASDAQ:URBN

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:

URBN has a better Return On Assets (5.68%) than 66.15% of its industry peers.
The Return On Equity of URBN (11.47%) is better than 65.38% of its industry peers.
The 3 year average ROIC (5.86%) for URBN is below the current ROIC(7.53%), indicating increased profibility in the last year.
The Profit Margin of URBN (4.56%) is better than 70.77% of its industry peers.
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 69.23% of the companies in the same industry.

Exploring NASDAQ:URBN's Health

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:URBN, the assigned 7 reflects its health status:

URBN has an Altman-Z score of 3.33. This indicates that URBN is financially healthy and has little risk of bankruptcy at the moment.
URBN has a better Altman-Z score (3.33) than 72.31% of its industry peers.
URBN has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
URBN has a better Quick ratio (0.81) than 63.85% of its industry peers.

Exploring NASDAQ:URBN's Growth

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:URBN was assigned a score of 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.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

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

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.