The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company value investors might notice is Urban Outfitters (URBN). URBN is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 12.99. This compares to its industry's average Forward P/E of 18.86. Over the past year, URBN's Forward P/E has been as high as 15.49 and as low as 9.10, with a median of 12.78.
We also note that URBN holds a PEG ratio of 1.07. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. URBN's PEG compares to its industry's average PEG of 1.46. Within the past year, URBN's PEG has been as high as 1.78 and as low as 0.80, with a median of 1.11.
Another notable valuation metric for URBN is its P/B ratio of 2.43. 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 solid versus its industry's average P/B of 6.74. Within the past 52 weeks, URBN's P/B has been as high as 2.97 and as low as 1.40, with a median of 2.12.
Finally, our model also underscores that URBN has a P/CF ratio of 10.73. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. URBN's P/CF compares to its industry's average P/CF of 16.10. Over the past 52 weeks, URBN's P/CF has been as high as 12.80 and as low as 7.56, with a median of 10.35.
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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Urban Outfitters, Inc. (URBN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
