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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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Urban Outfitters (URBN). URBN is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 11.73 right now. For comparison, its industry sports an average P/E of 13.43. Over the past year, URBN's Forward P/E has been as high as 16.59 and as low as 7.41, with a median of 10.85.

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Investors will also notice that URBN has a PEG ratio of 0.65. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. URBN's PEG compares to its industry's average PEG of 0.84. Within the past year, URBN's PEG has been as high as 0.92 and as low as 0.41, with a median of 0.60.

We should also highlight that URBN has a P/B ratio of 1.62. 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 solid versus its industry's average P/B of 2.51. URBN's P/B has been as high as 1.62 and as low as 1.05, with a median of 1.33, over the past year.

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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Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report

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Zacks Investment Research