Back to top

Image: Bigstock

URBN or IDEXY: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

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 presents investors with the better value opportunity right now? Let's 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.

Currently, Urban Outfitters has a Zacks Rank of #2 (Buy), while Industria de Diseno Textil SA has a Zacks Rank of #3 (Hold). This means that URBN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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 14.40, while IDEXY has a forward P/E of 15.82. We also note that URBN has a PEG ratio of 1.14. 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 2.11.

Another notable valuation metric for URBN is its P/B ratio of 2.51. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, IDEXY has a P/B of 10.22.

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

URBN sticks out from IDEXY in both our Zacks Rank and Style Scores models, so value investors will likely feel that URBN is the better 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 >>

Industria de Diseno Textil SA (IDEXY) - free report >>

Published in