Is Urban Outfitters (URBN) Stock Undervalued Right Now?

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 an A grade for Value. The stock is trading with a P/E ratio of 13.05, which compares to its industry's average of 18.12. Over the past 52 weeks, URBN's Forward P/E has been as high as 15.49 and as low as 9.10, with a median of 12.80.

We also note that URBN holds a PEG ratio of 1.07. 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 has an average PEG of 1.36 right now. 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.

We should also highlight that URBN has a P/B ratio of 2.48. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. URBN's current P/B looks attractive when compared to its industry's average P/B of 6.55. Over the past year, URBN's P/B has been as high as 2.97 and as low as 1.40, with a median of 2.14.

Finally, investors should note that URBN has a P/CF ratio of 10.93. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. URBN's P/CF compares to its industry's average P/CF of 15.64. Over the past year, URBN's P/CF has been as high as 12.80 and as low as 7.56, with a median of 10.42.

Value investors will likely look at more than just these metrics, but the above data helps show that Urban Outfitters is likely undervalued currently. And when considering the strength of its earnings outlook, URBN sticks out as one of the market's strongest value stocks.

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This article originally published on Zacks Investment Research (zacks.com).

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