A strong stock as of late has been Urban Outfitters (URBN). Shares have been marching higher, with the stock up 9.6% over the past month. The stock hit a new 52-week high of $76.5 in the previous session. Urban Outfitters has gained 36.6% since the start of the year compared to the 6.2% move for the Zacks Retail-Wholesale sector and the -10.1% return for the Zacks Retail - Apparel and Shoes industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 21, 2025, Urban Outfitters reported EPS of $1.16 versus consensus estimate of $0.81.
For the current fiscal year, Urban Outfitters is expected to post earnings of $4.96 per share on $6.02 in revenues. This represents a 22.17% change in EPS on a 8.51% change in revenues. For the next fiscal year, the company is expected to earn $5.45 per share on $6.42 in revenues. This represents a year-over-year change of 9.91% and 6.64%, respectively.
Valuation Metrics
Though Urban Outfitters has recently hit a 52-week high, what is next for Urban Outfitters? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Urban Outfitters has a Value Score of B. The stock's Growth and Momentum Scores are B and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 15.1X current fiscal year EPS estimates, which is not in-line with the peer industry average of 17.9X. On a trailing cash flow basis, the stock currently trades at 13.9X versus its peer group's average of 7.5X. Additionally, the stock has a PEG ratio of 1.26. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Urban Outfitters currently has a Zacks Rank of #2 (Buy) thanks to a solid earnings estimate revision trend.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Urban Outfitters passes the test. Thus, it seems as though Urban Outfitters shares could have potential in the weeks and months to come.
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Urban Outfitters, Inc. (URBN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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