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

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Investors with an interest in Retail - Apparel and Shoes stocks have likely encountered both 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 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.

Both Urban Outfitters and Industria de Diseno Textil SA have a Zacks Rank of # 1 (Strong Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

URBN currently has a forward P/E ratio of 10.25, while IDEXY has a forward P/E of 20.79. We also note that URBN has a PEG ratio of 0.43. 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. IDEXY currently has a PEG ratio of 1.34.

Another notable valuation metric for URBN is its P/B ratio of 1.55. 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, IDEXY has a P/B of 6.57.

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