Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Urban Outfitters's share price is below the future cash flow value, and at a moderate discount (> 20%).
Urban Outfitters's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Urban Outfitters's earnings available for a low price, and how does
this compare to other companies in the same industry?
Urban Outfitters is overvalued based on earnings compared to the US Specialty Retail industry average.
Urban Outfitters is overvalued based on earnings compared to the US market.
Price based on expected Growth
Urban Outfitters's expected growth come at a high price?
Urban Outfitters is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on
Urban Outfitters is overvalued based on assets compared to the US Specialty Retail industry average.
Discounted cash flow (2 Stage Free Cash Flow to Equity)
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value. We use
analyst's estimates of cash flows going forward 5 years.
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is
limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($3,663,128,258).
The risk free rate of
2.47% is from the 10 year government bond rate in
The bottom-up beta is estimated by analysing other companies in the same
The Equity Risk Premium is calculated by subtracting the risk free rate from
the market return premium (7.53%) (source: Buffet).
The dividend discount model is automatically used for companies in the
following industries: Banks, Insurance, Real Estate Investment Trusts (REITs),
Diversified Financial Services and Capital Markets.
The future performance of a company is measured in the same way as past
performance, by looking at estimated
and how much profit it is expected to make.
Future estimates come from
professional analysts. Just like forecasting the weather, they don’t always get
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Urban Outfitters's earnings growth is expected to exceed the low risk savings rate of 4.5%.
Growth vs Market Checks
Urban Outfitters's earnings growth is positive but not above the US market average.
Urban Outfitters's revenue growth is positive but not above the US market average.
Annual Growth Rates Comparison
Analysts growth expectations
High Growth Checks
Urban Outfitters's earnings are expected to grow by 9.1% yearly, however this is not considered high growth (20% yearly).
Urban Outfitters's revenue is expected to grow by 3.2% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Performance in 3 years
In the same way as past performance we look at the future estimated return
(profit) compared to the available
funds. We do this looking forward 3 years.
Urban Outfitters is not expected to perform strongly, Return on Equity (ROE) in 3 years is estimated to be below 20%.
Improvement & Relative to industry
Performance (ROE) is expected to be above the current US Specialty Retail industry average.
An improvement in Urban Outfitters's performance (ROE) is expected over the next 3 years.
Urban Outfitters's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
1/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Urban Outfitters's finances.
The net worth of a company is the difference between its assets and liabilities.
Urban Outfitters is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Urban Outfitters's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Urban Outfitters's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of stock/ inventory/ unsold assets.
Urban Outfitters has no debt, it does not need to be covered by total short term assets.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Richard A. Hayne co-founded Urban Outfitters, Inc. in 1970 and has been its Chief Executive Officer since January 10, 2012. Mr. Hayne served as the President of Urban Outfitters, Inc. from 1976 to February 25, 2016 and served as its Principal Executive Officer until May 22, 2007. Mr. Hayne has been the Chairman and a Director of Urban Outfitters, Inc. since incorporation in 1976. He has been a Director of UK Group Finance Holdco Limited since January 5, 2016. He is a graduate of Lehigh University.
Richard's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.
Richard's compensation appears reasonable.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Urban Outfitters management team is over 5 years, this suggests they are a seasoned and experienced team.
President & CEO of Anthropologie Group
Co-Founder & Director
Chief Financial Officer
Chief Operating Officer
Chief Creative Officer
Chief Executive Officer of Urban Outfitters Group
Director of Investor Relations
General Counsel & Corporate Secretary
Chief Operating Officer of the Anthropologie Division
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Urban Outfitters board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Urban Outfitters Inc (URBN): Will The Growth Last?
See our latest analysis for URBN Exciting times ahead for URBN Analyst expectation from the stock's 23 analysts is one of positive sentiment, with earnings estimated to expand from current levels of $1.5 to $1.575 over the next couple of years. … This illustrates a relatively optimistic outlook in the near term, with a relatively solid earnings per share growth rate of 5.03% over the next few years. … The company delivered a growth rate of 19.92% over the past couple of years, which is indicative of a sustained level of growth – no surprises there for shareholders.
What Is Urban Outfitters Inc's (URBN) Share Price Doing?
It’s trading around 15% below my intrinsic value, which means if you buy URBN today, you’d be paying a fair price for it. … If you’ve been keeping tabs on URBN for a while, now may not be the most optimal time to buy, given it is trading around its fair value. … The price seems to be trading at fair value, which means there’s less benefit from mispricing.
Urban Outfitters, Inc. engages in the retail and wholesale of general consumer products. It operates through two segments, Retail and Wholesale. The company retails women’s and men’s fashion apparel, intimates, footwear, beauty and accessories, home goods, activewear, and electronics for young adults aged 18 to 28 under the Urban Outfitters brand; and assortment, including women’s casual apparel and accessories, intimates, shoes, beauty, home furnishings, and various gifts and decorative items for women aged 28 to 45 under the Anthropologie brand. It also offers a collection of heirloom quality wedding gowns, bridesmaid frocks, party dresses, assorted jewelry, headpieces, footwear, lingerie, and decorations under the Bhldn brand; and lifestyle home and garden products, antiques, live plants, flowers, wellness products, and accessories under the Terrain brand, as well as operates food and beverage restaurant services. In addition, the company operates Free People retail stores that provide merchandise mix of casual women’s apparel, intimates, shoes, accessories, activewear, beauty and wellness products, home products, and gifts for women aged 25 to 30. It serves its customers directly through retail stores, Websites, mobile applications, catalogs, and customer contact centers. As of November 20, 2017, the company operated 245 Urban Outfitters stores in the United States, Canada, and Europe; 227 Anthropologie Group stores comprising Anthropologie, Bhldn, and Terrain brands in the United States, Canada, and Europe, as well as 132 Free People stores in the United States and Canada; and 12 food and beverage restaurants. It also engages in the wholesale business under the Free People brand that designs, develops, and markets young women’s contemporary casual apparel and shoes to approximately 1,900 specialty stores and select department stores worldwide. The company was founded in 1970 and is based in Philadelphia, Pennsylvania.
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