URBAN OUTFITTERS INC (NASDAQ:URBN) – A GARP Stock Worth Considering

URBAN OUTFITTERS INC (NASDAQ:URBN) fits the criteria for long-term investors seeking growth at a reasonable price (GARP). The company operates in the retail sector with brands like Anthropologie, Free People, and Urban Outfitters, along with a subscription rental service under Nuuly. Our Peter Lynch-inspired screener identified URBN due to its balanced growth, profitability, and valuation metrics.

Why URBN Fits the GARP Approach

• Sustainable Growth: URBN’s earnings per share (EPS) have grown at an average annual rate of 15.5% over the past five years, aligning with Peter Lynch’s preference for steady but not excessive growth.
• Attractive Valuation: The stock’s PEG ratio (0.99) is below 1, indicating it is reasonably priced relative to its earnings growth.
• Strong Profitability: With a return on equity (ROE) of 18.47%, URBN outperforms most peers in the specialty retail industry.
• Healthy Financials: The company carries no debt (Debt/Equity = 0) and maintains a solid current ratio (1.40), reflecting good liquidity.

Fundamental Strengths

URBN’s fundamental analysis highlights several positives:

• Profitability: High profit margins (7.91%) and improving operating margins suggest efficient operations.
• Financial Health: A strong Altman-Z score (4.40) indicates low bankruptcy risk, while share buybacks signal confidence in future performance.
• Valuation: Trading at a P/E of 15.37, URBN is cheaper than 77% of its industry peers and the broader S&P 500.

For a deeper dive, review the full fundamental report on URBN.

Our Peter Lynch Strategy screener lists more stocks that meet these criteria and is updated regularly.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own analysis before making investment decisions.