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URBN vs. TPR: Which Stock Should Value Investors Buy Now?

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Investors interested in Retail - Apparel and Shoes stocks are likely familiar with Urban Outfitters (URBN - Free Report) and Tapestry (TPR - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Urban Outfitters is sporting a Zacks Rank of #1 (Strong Buy), while Tapestry has a Zacks Rank of #3 (Hold). This means that URBN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

URBN currently has a forward P/E ratio of 15.78, while TPR has a forward P/E of 18.18. We also note that URBN has a PEG ratio of 1.32. 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. TPR currently has a PEG ratio of 1.55.

Another notable valuation metric for URBN is its P/B ratio of 3.17. 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. For comparison, TPR has a P/B of 4.47.

These are just a few of the metrics contributing to URBN's Value grade of B and TPR's Value grade of C.

URBN stands above TPR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that URBN is the superior value option right now.


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