The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Urban Outfitters (URBN). URBN is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 13.05. This compares to its industry's average Forward P/E of 14.45. Over the past 52 weeks, URBN's Forward P/E has been as high as 15.49 and as low as 9.10, with a median of 12.80.
Another valuation metric that we should highlight is URBN's P/B ratio of 2.48. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 6.16. Within the past 52 weeks, URBN's P/B has been as high as 2.97 and as low as 1.40, with a median of 2.14.
Finally, investors will want to recognize that URBN has a P/CF ratio of 10.93. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 13.71. Within the past 12 months, URBN's P/CF has been as high as 12.80 and as low as 7.56, with a median of 10.42.
These are only a few of the key metrics included in Urban Outfitters's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, URBN looks like an impressive value stock at the moment.
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Urban Outfitters, Inc. (URBN): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).