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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is Urban Outfitters (URBN). URBN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 14.65. This compares to its industry's average Forward P/E of 15.22. Over the last 12 months, URBN's Forward P/E has been as high as 21.58 and as low as 14.53, with a median of 17.45.
Investors will also notice that URBN has a PEG ratio of 1.22. 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 currently sports an average PEG of 1.37. Over the past 52 weeks, URBN's PEG has been as high as 1.80 and as low as 1.13, with a median of 1.46.
Another notable valuation metric for URBN is its P/B ratio of 3.10. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.53. Over the past 12 months, URBN's P/B has been as high as 3.86 and as low as 1.89, with a median of 3.03.
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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Urban Outfitters, Inc. (URBN): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
