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URBN or FIGS: Which Is the Better Value Stock Right Now?
Investors with an interest in Retail - Apparel and Shoes stocks have likely encountered both Urban Outfitters (URBN - Free Report) and Figs (FIGS - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Urban Outfitters has a Zacks Rank of #2 (Buy), while Figs has a Zacks Rank of #4 (Sell). 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 only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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 13.85, while FIGS has a forward P/E of 63.57. We also note that URBN has a PEG ratio of 0.77. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. FIGS currently has a PEG ratio of 29.29.
Another notable valuation metric for URBN is its P/B ratio of 1.28. 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 3.81.
These are just a few of the metrics contributing to URBN's Value grade of A and FIGS's Value grade of D.
URBN sticks out from FIGS in both our Zacks Rank and Style Scores models, so value investors will likely feel that URBN is the better option right now.