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

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Investors interested in Retail - Apparel and Shoes stocks are likely familiar with Urban Outfitters (URBN - Free Report) and Industria de Diseno Textil SA (IDEXY - 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Urban Outfitters and Industria de Diseno Textil SA are both sporting a Zacks Rank of #2 (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 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

URBN currently has a forward P/E ratio of 13.17, while IDEXY has a forward P/E of 17.30. We also note that URBN has a PEG ratio of 1.08. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. IDEXY currently has a PEG ratio of 2.42.

Another notable valuation metric for URBN is its P/B ratio of 2.35. 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 7.72.

Based on these metrics and many more, URBN holds a Value grade of A, while IDEXY has 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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Urban Outfitters, Inc. (URBN) - free report >>

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