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URBN vs. FIGS: Which Stock Is the Better Value Option?
Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Urban Outfitters (URBN - Free Report) and Figs (FIGS - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Urban Outfitters is sporting a Zacks Rank of #2 (Buy), while Figs has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that URBN likely has seen a stronger improvement to its earnings outlook than FIGS has recently. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
URBN currently has a forward P/E ratio of 16.67, while FIGS has a forward P/E of 73.69. We also note that URBN has a PEG ratio of 0.93. 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. FIGS currently has a PEG ratio of 33.96.
Another notable valuation metric for URBN is its P/B ratio of 1.54. 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, FIGS has a P/B of 4.42.
Based on these metrics and many more, URBN holds a Value grade of A, while FIGS has a Value grade of F.
URBN stands above FIGS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that URBN is the superior value option right now.