URBAN OUTFITTERS INC (NASDAQ:URBN) – A GARP candidate with strong fundamentals

URBAN OUTFITTERS INC (NASDAQ:URBN) surfaced in our Peter Lynch-inspired screen, which identifies companies with steady growth, solid financial health, and reasonable valuations. URBN stands out with its balance of profitability, manageable debt, and consistent earnings expansion, making it a potential fit for long-term investors seeking growth at a reasonable price.

Key strengths of URBN

• Earnings growth: URBN has delivered a 5-year average EPS growth of 15.5%, aligning with Peter Lynch’s preference for sustainable but not excessive expansion.
• Attractive valuation: The stock’s PEG ratio (0.97) suggests it is reasonably priced relative to its growth, staying below the preferred threshold of 1.
• Strong profitability: With an ROE of 18.47%, the company efficiently generates returns for shareholders, outperforming many peers in the specialty retail sector.
• Healthy balance sheet: URBN carries no debt, a rare advantage that enhances financial flexibility and reduces risk.
• Liquidity: A current ratio of 1.40 indicates sufficient short-term asset coverage for liabilities.

Fundamental snapshot

URBN earns a 7/10 in our fundamental rating, reflecting above-average profitability and financial health. Margins are robust, with a 7.91% profit margin and 9.29% operating margin, both ranking well within the top tier of its industry. While revenue growth has been modest, earnings have expanded at a stronger pace, supported by efficient capital allocation (ROIC: 11.99%).

For a deeper dive, review the full fundamental analysis of URBN.

Our Peter Lynch Strategy screener offers more stocks that fit this disciplined approach.

Disclaimer

This is not investing advice. The observations here are based on current data, but investors should conduct their own research before making decisions.