Many stocks have been testing new highs in 2020, and one of the most notable is Urban Outfitters Inc. (URBN). Currently, URBN is trading at $21.29 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $18.69.
To add more color to this target, the company’s high over the last year is $31.41 and the low is $12.28. Over the last 52 weeks, URBN is down -32.22% while the S&P 500 is up 1.21%. The catalyst for this interesting swing was the company’s recent earnings report.
A Notable Earnings Report
In the last quarter, URBN reported a profit of $333.79 million. Urban Outfitters Inc. also saw revenues increase to $1.17 billion. In addition, URBN has free cash flow of $56.46 million as of 01-2020 The company’s EBITDA came in at -$61.09 million which compares well with its peers.
URBN booked profit margins of 6.30%, its Return on Equity (ROE) is 16.50%, and its Return on Assets is 7.20%. All told, it is clear that, URBN needs to be on your watchlist.
About Urban Outfitters Inc.
If readers are unfamiliar, Urban Outfitters, Inc. engages in the retail and wholesale of general consumer products. The company operates in two segments, Retail and wholesale. It operates Urban Outfitters stores, which offer women’s and men’s fashion apparel, activewear, intimates, footwear, accessories, home goods, electronics, and beauty products for young adults aged 18 to 28; and Anthropologie stores that provide women’s casual apparel, accessories, intimates, shoes, and home furnishings, as well as gifts, decorative items, and beauty and wellness products for women aged 28 to 45. The company also operates Bhldn stores, which offer heirloom quality wedding gowns, bridesmaid frocks, party dresses, assorted jewelry, headpieces, footwear, lingerie, and decorations; and Terrain stores that provide lifestyle home products, garden and outdoor living products, antiques, live plants, flowers, wellness products, and accessories. In addition, it operates Free People retail stores, which offer casual women’s apparel, intimates, activewear, shoes, accessories, home products, gifts, and beauty and wellness products for young women aged 25 to 30; and restaurants. The company serves its customers directly through retail stores, Websites, mobile applications, catalogs, franchised or third-party operated stores, and digital businesses. As of January 31, 2019, it operated 245 Urban Outfitters, 227 Anthropologie Group, and 135 Free People stores in the United States, Canada, and Europe; and 13 restaurants. The company is also involved in the wholesale of young women’s contemporary casual apparel, intimates, activewear, and shoes under the Free People brand; and home goods under the Anthropologie brand to approximately 2,200 department and specialty stores worldwide. The company was founded in 1970 and is based in Philadelphia, Pennsylvania.
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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. URBN has a short ratio of 1.79 and outstanding shares of 97.96M.
URBN has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 2.02 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -0.05. Urban Outfitters Inc. URBN also noted assets of $3.32 billion at the end of the last quarter. Investors should also keep an eye on sector updates as URBN has historically followed its peers on positive news.
All told, Urban Outfitters Inc. URBN has strung together solid data and demonstrated underlying fundamentals. At its current valuation, URBN represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.
Urban Outfitters Inc. URBN is now commanding a market cap of 2.03B and a float of 57.42M. URBN is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of URBN stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in URBN, either long or short, and we have not been compensated for this article.