Its Stock Has Paid Off Big Time For Urban Outfitters Inc.

Urban Outfitters Inc. (NASDAQ: URBN) stock fell -1.42% on Friday to $20.82 against a previous-day closing price of $21.12. With 1.72 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.55 million shares. During the session, the Apparel Retail company that operates in wider Consumer Cyclical sector, reached to the highest price of $21.26 whereas the lowest price it dropped to was $20.53. The 52-week range on URBN shows that it touched its highest point at $41.03 and its lowest point at $17.81 during that stretch. It currently has a 1-year price target of $24.23. Beta for the stock currently stands at 1.42.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of URBN was up-trending over the past week, with a rise of 2.31%, but this was up by 5.47% over a month. Three-month performance dropped to -16.92% while six-month performance fell -26.97%. The stock lost -41.55% in the past year, while it has lost -29.09% so far this year. A look at the trailing 12-month EPS for URBN yields 2.91 with Next year EPS estimates of 2.58. For the next quarter, that number is 0.71. This implies an EPS growth rate of -5.80% for this year and 12.97% for next year. EPS is expected to grow by 0.50% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 11.00%.

Float and Shares Shorts:

At present, 95.48 million URBN shares are outstanding with a float of 62.41 million shares on hand for trading. On Jul 14, 2022, short shares totaled 14.24 million, which was 15.37% higher than short shares on Jun 14, 2022. In addition to Mr. Richard A. Hayne as the firm’s Co-Founder, Chairman & CEO, Ms. Margaret A. Hayne serves as its Chief Creative Officer, Co-Pres & Director.

Institutional Ownership:

Through their ownership of 81.04% of URBN’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 40.82% of URBN, in contrast to 39.25% held by mutual funds. Shares owned by individuals account for 38.65%. As the largest shareholder in URBN with 10.29% of the stake, Shapiro Capital Management LLC holds 9,535,775 shares worth 9,535,775. A second-largest stockholder of URBN, BlackRock Fund Advisors, holds 7,259,270 shares, controlling over 7.83% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in URBN, holding 6,210,730 shares or 6.70% stake. With a 4.89% stake in URBN, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 4,536,026 shares are owned by the mutual fund manager. The MFS Mid Cap Value Fund, which owns about 2.28% of URBN stock, is the second-largest Mutual Fund holder. It holds 2,108,848 shares valued at 39.35 million. MFS New Discovery Value Fund holds 2.26% of the stake in URBN, owning 2,095,043 shares worth 39.09 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Apr 29, 2022, URBN reported revenue of $1.05B and operating income of $46.24M. Over the past year, revenue came in at $4.67B while operating income stood at $381.30M. It generated $31.53M net income for the quarter, which came to $288.60M over the last twelve months. The EBITDA in the recently reported quarter was $72.94M and diluted EPS was $0.33. EBITDA for the full year was $485.21M.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for URBN since 16 analysts follow the stock currently. There are 5 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 11 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With URBN analysts setting a high price target of $34.00 and a low target of $19.00, the average target price over the next 12 months is $23.92. Based on these targets, URBN could surge 63.3% to reach the target high and fall by -8.74% to reach the target low. Reaching the average price target will result in a growth of 14.89% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. URBN will report FY 2023 earnings on 03/07/2023. Analysts have provided yearly estimates in a range of $2.48 being high and $1.90 being low. For URBN, this leads to a yearly average estimate of $2.23. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Urban Outfitters Inc. surprised analysts by -$0.09 when it reported $0.33 EPS against a consensus estimate of $0.42. The surprise factor in the prior quarter was -$0.09. Based on analyst estimates, the high estimate for the next quarter is $0.80 and the low estimate is $0.58. The average estimate for the next quarter is thus $0.71.

Summary of Insider Activity:

Insiders traded URBN stock several times over the past three months with 8 Buys and 0 Sells. In these transactions, 31,200 shares were bought while 0 shares were sold. The number of buy transactions has increased to 22 while that of sell transactions has risen to 17 over the past year. The total number of shares bought during that period was 203,935 while 100,411 shares were sold.

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