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URBN vs. IDEXY: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Urban Outfitters (URBN - Free Report) and Industria de Diseno Textil SA (IDEXY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Both Urban Outfitters and Industria de Diseno Textil SA have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.

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.

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 11.79, while IDEXY has a forward P/E of 20.34. We also note that URBN has a PEG ratio of 0.66. 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. IDEXY currently has a PEG ratio of 2.04.

Another notable valuation metric for URBN is its P/B ratio of 1.43. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, IDEXY has a P/B of 5.71.

These metrics, and several others, help URBN earn a Value grade of A, while IDEXY has been given a Value grade of C.

Both URBN and IDEXY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that URBN is the superior value option right now.


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