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URBN vs. IDEXY: Which Stock Is the Better Value Option?
Investors with an interest in Retail - Apparel and Shoes stocks have likely encountered both Urban Outfitters (URBN - Free Report) and Industria de Diseno Textil SA (IDEXY - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Urban Outfitters is sporting a Zacks Rank of #1 (Strong Buy), while Industria de Diseno Textil SA has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that URBN likely has seen a stronger improvement to its earnings outlook than IDEXY has recently. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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 14.81, while IDEXY has a forward P/E of 25.68. We also note that URBN has a PEG ratio of 1.20. 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 2.39.
Another notable valuation metric for URBN is its P/B ratio of 2.26. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, IDEXY has a P/B of 9.11.
Based on these metrics and many more, URBN holds a Value grade of B, while IDEXY has a Value grade of F.
URBN stands above IDEXY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that URBN is the superior value option right now.