Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Urban Outfitters (URBN - Free Report) and Kering SA (PPRUY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Urban Outfitters and Kering SA are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. Investors should feel comfortable knowing that URBN likely has seen a stronger improvement to its earnings outlook than PPRUY has recently. But this is just one piece of the puzzle 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.

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 11.65, while PPRUY has a forward P/E of 16.40. We also note that URBN has a PEG ratio of 0.65. 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. PPRUY currently has a PEG ratio of 2.50.

Another notable valuation metric for URBN is its P/B ratio of 1.57. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, PPRUY has a P/B of 4.70.

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

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Urban Outfitters, Inc. (URBN) - free report >>

Kering SA (PPRUY) - free report >>

Published in