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Urban Outfitters (URBN) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Urban Outfitters (URBN - Free Report) closed at $39.69, marking a -1.51% move from the previous day. This change lagged the S&P 500's 1.09% gain on the day. Meanwhile, the Dow gained 0.97%, and the Nasdaq, a tech-heavy index, added 2.01%.

Heading into today, shares of the clothing and accessories retailer had gained 0.83% over the past month, outpacing the Retail-Wholesale sector's loss of 13.73% and the S&P 500's loss of 7.81% in that time.

Investors will be hoping for strength from URBN as it approaches its next earnings release, which is expected to be November 19, 2018. The company is expected to report EPS of $0.77, up 87.8% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $968.80 million, up 8.52% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.66 per share and revenue of $3.96 billion, which would represent changes of +59.28% and +9.57%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for URBN. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.13% lower within the past month. URBN is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, URBN is currently trading at a Forward P/E ratio of 15.14. For comparison, its industry has an average Forward P/E of 16.75, which means URBN is trading at a discount to the group.

We can also see that URBN currently has a PEG ratio of 1.19. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Apparel and Shoes industry currently had an average PEG ratio of 1.73 as of yesterday's close.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 87, which puts it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow URBN in the coming trading sessions, be sure to utilize Zacks.com.


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