Fashion is not just about trends; it's about making smart investments. Urban Outfitters, a key player in the Apparel Retail industry, has recently caught the eye of investors with its robust performance. With a market capitalization of $3.6 billion, this specialty retail giant is making waves in the consumer discretionary sector. The company reported a net income from continuing operations of $287.7 million, showcasing its strong financial health. As we look ahead, the EPS estimate for next year stands at 3.53, indicating potential growth. With a Wall Street target price of approximately $41.35, Urban Outfitters presents a compelling opportunity for those looking to capitalize on the dynamic world of retail fashion. Currently, Urban Outfitters' capital expenditures relative to depreciation remain steady compared to last year. By November 26, 2024, the company's free cash flow per share is expected to rise to $3.51, while its enterprise value might decrease by approximately $2.4 billion. In this article, we'll review Urban Outfitters' performance and assess whether its stock is fairly valued as we approach December. Additionally, we'll highlight key factors that investors should keep in mind for the upcoming month.
Urban Outfitters is currently priced at $38.47 per share, which seems high given its modest future outlook. The stock has a performance score of 7 out of 100, suggesting limited potential. With a beta of 1.06, Urban Outfitters carries a slightly higher risk compared to the overall market, meaning its returns are quite sensitive to market fluctuations. As the market moves, Urban Outfitters is likely to mirror those changes. The stock's risk level is at 1.96%. To make an informed decision, consider evaluating Urban Outfitters' value at risk and examining the relationship between its Jensen Alpha and skewness. This analysis can help determine if the stock will continue to follow its current price trends.
Key Points
Urban Outfitters has shown impressive gains, making it a compelling investment opportunity, especially when considering its robust market capitalization of 3.6B and a gross profit of 1.4B. These figures highlight the company's strong financial footing in the apparel retail sector, suggesting potential for continued growth and stability for investors.Urban Outfitters
financial leverage refers to using borrowed capital as a funding source to finance Urban Outfitters ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Urban Outfitters financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Urban Outfitters' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Urban Outfitters' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Urban Outfitters's total debt and its cash.
Urban Outfitters shows a total of 92.26 Million
outstanding shares. The majority of Urban Outfitters
outstanding shares are owned by
institutional holders. These institutional investors are usually referred to as non-private investors looking to take positions in Urban Outfitters to benefit from reduced commissions. Consequently, institutions are subject to a different set of regulations than regular investors in Urban Outfitters. Please pay attention to any change in the institutional holdings of Urban Outfitters as this could imply that something significant has changed or is about to change at the company.
Also note that roughly seven million one hundred seventy-seven thousand eight hundred fifty-two invesors are currently shorting Urban Outfitters expressing very little confidence in its future performance.
| 2021 | 2022 | 2023 | 2024 (projected) |
Gross Profit | 1.5B | 1.4B | 1.7B | 1.8B | Total Revenue | 4.5B | 4.8B | 5.2B | 5.4B |
Ownership Breakdown
| Insiders32.67% | Institutions75.11% |
| Retail Investors | -7.78 |
| Insiders | 32.67 |
| Institutions | 75.11 |
They say "the trend is your friend," and Urban Outfitters is certainly riding a positive wave. With a PEG ratio of 0.98, the stock appears attractively valued, suggesting potential for growth at a reasonable price. The company, a key player in the Apparel Retail industry, boasts a solid operating income of $388.1 million, reflecting its ability to generate profits efficiently. Additionally, with institutions holding 75.11% of its shares, there's a strong vote of confidence from the big players. As Urban Outfitters continues to deliver impressive gains, it presents a compelling opportunity for investors seeking exposure in the Consumer Discretionary sector..
Are Urban Outfitters technical ratios showing a relapse?
Urban Outfitters' recent increase in mean deviation to over 1.57 suggests a noticeable change in its stock price volatility. This could hint at potential shifts in its technical metrics. Such volatility might mean the stock is moving away from its usual trading patterns, possibly reflecting uncertainty among investors. While these fluctuations can offer trading opportunities, they also call for caution, as they might point to deeper issues affecting future performance. Investors should keep a close eye on these technical signals to determine if this is a temporary fluctuation or a sign of more significant changes. Despite this, Urban Outfitters generally shows low volatility, with a skewness of 0.37 and kurtosis of -0.38. Understanding these trends can help investors better time their market moves and manage risk effectively.
Our Final Take On Urban Outfitters
Although some other entities within the apparel retail industry are still a little expensive, even after the recent corrections, Urban Outfitters may offer a potential longer-term growth to investors. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither trade nor short any shares of Urban Outfitters at this time. The Urban Outfitters risk-reward trade off is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Urban Outfitters.
Aina Ster is a Member of Macroaxis Editorial Board. Aina delivers weekly perspective on ongoing market and economic trends, analysis and tips from predictive analysis to forecasting across various financial instruments.
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