Have you been paying attention to shares of Urban Outfitters (URBN)? Shares have been on the move with the stock up 41.3% over the past month. The stock hit a new 52-week high of $75.57 in the previous session. Urban Outfitters has gained 37.1% since the start of the year compared to the 1.9% move for the Zacks Retail-Wholesale sector and the -9% return for the Zacks Retail - Apparel and Shoes industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any 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 $4.91 per share on $5.99 billion in revenues. This represents a 20.94% change in EPS on a 7.95% change in revenues. For the next fiscal year, the company is expected to earn $5.36 per share on $6.37 billion in revenues. This represents a year-over-year change of 9.23% and 6.36%, respectively.
Valuation Metrics
Urban Outfitters may be at a 52-week high right now, but what might the future hold for the stock? 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). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. 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 C and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 15.3X current fiscal year EPS estimates, which is not in-line with the peer industry average of 17X. On a trailing cash flow basis, the stock currently trades at 13.9X versus its peer group's average of 6.6X. Additionally, the stock has a PEG ratio of 1.28. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Urban Outfitters currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
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 fits the bill. Thus, it seems as though Urban Outfitters shares could have potential in the weeks and months to come.
How Does URBN Stack Up to the Competition?
Shares of URBN have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Canada Goose Holdings Inc. (GOOS). GOOS has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of D.
Earnings were strong last quarter. Canada Goose Holdings Inc. beat our consensus estimate by 43.75%, and for the current fiscal year, GOOS is expected to post earnings of $0.88 per share on revenue of $1 billion.
Shares of Canada Goose Holdings Inc. have gained 53.3% over the past month, and currently trade at a forward P/E of 14.3X and a P/CF of 7.29X.
The Retail - Apparel and Shoes industry may rank in the bottom 54% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for URBN and GOOS, even beyond their own solid fundamental situation.
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Urban Outfitters, Inc. (URBN): Free Stock Analysis Report Canada Goose Holdings Inc. (GOOS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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