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Should Value Investors Buy Urban Outfitters (URBN) Stock?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Urban Outfitters (URBN) is a stock many investors are watching right now. URBN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 14.05 right now. For comparison, its industry sports an average P/E of 15.68. Over the last 12 months, URBN's Forward P/E has been as high as 21.58 and as low as 12.80, with a median of 17.45.

URBN is also sporting a PEG ratio of 1.10. 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 PEG compares to its industry's average PEG of 1.33. Within the past year, URBN's PEG has been as high as 1.80 and as low as 1, with a median of 1.46.

We should also highlight that URBN has a P/B ratio of 3.01. The P/B ratio pits a stock's market value against 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 4.11. Within the past 52 weeks, URBN's P/B has been as high as 3.86 and as low as 2.10, with a median of 3.08.

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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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.

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