NASDAQ:URBN, an undervalued stock with good fundamentals.

Last update: Aug 29, 2024

Uncover the potential of URBAN OUTFITTERS INC (NASDAQ:URBN) as our stock screener's choice for an undervalued stock. NASDAQ:URBN maintains a strong financial position and offers an appealing valuation. We'll delve into the specifics below.

ChartMill's Evaluation of Valuation

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:URBN has earned a 8 for valuation:

A Price/Earnings ratio of 10.44 indicates a reasonable valuation of URBN.
84.55% of the companies in the same industry are more expensive than URBN, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of URBN to the average of the S&P500 Index (30.00), we can say URBN is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 9.02, the valuation of URBN can be described as reasonable.
Based on the Price/Forward Earnings ratio, URBN is valued cheaper than 83.74% of the companies in the same industry.
URBN is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.62, which is the current average of the S&P500 Index.
Based on the Enterprise Value to EBITDA ratio, URBN is valued cheaper than 91.06% 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 74.80% 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.
URBN has a very decent profitability rating, which may justify a higher PE ratio.

Looking at the Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:URBN, the assigned 6 is noteworthy for profitability:

Looking at the Return On Assets, with a value of 7.28%, URBN is in the better half of the industry, outperforming 77.24% of the companies in the same industry.
URBN has a better Return On Equity (13.83%) than 73.17% of its industry peers.
The Return On Invested Capital of URBN (9.29%) is better than 72.36% of its industry peers.
The 3 year average ROIC (8.69%) for URBN is below the current ROIC(9.29%), indicating increased profibility in the last year.
With a decent Profit Margin value of 5.83%, URBN is doing good in the industry, outperforming 78.86% of the companies in the same industry.
With a decent Operating Margin value of 7.69%, URBN is doing good in the industry, outperforming 78.86% of the companies in the same industry.

Assessing Health Metrics for NASDAQ:URBN

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:URBN has earned a 7 out of 10:

URBN has an Altman-Z score of 3.46. This indicates that URBN is financially healthy and has little risk of bankruptcy at the moment.
URBN has a Altman-Z score of 3.46. This is in the better half of the industry: URBN outperforms 78.05% of its industry peers.
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.
URBN has a better Quick ratio (0.86) than 69.11% of its industry peers.

Understanding NASDAQ:URBN's Growth

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:URBN scores a 5 out of 10:

The Earnings Per Share has grown by an impressive 46.25% over the past year.
Based on estimates for the next years, URBN will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.83% on average per year.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

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

For an up to date full fundamental analysis you can check the fundamental report of URBN

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.