Which stock offers the better value option?

Investors interested in stocks in the Retail – Apparel & Footwear sector have probably heard of Urban Outfitters (URBN) and Industria de Diseno Textil SA (IDEXY). But which of these two stocks currently offers investors the better value opportunity? Let’s take a closer look.

We have found that the best way to discover great value opportunities is to combine a strong Zacks Rank with an outstanding grade in the Value category of our Style Scores system. The proven Zacks Rank places an emphasis on earnings estimates and estimate revisions, while our Style Scores aim to identify stocks with specific traits.

Both Urban Outfitters and Industria de Diseno Textil SA currently have a Zacks Rank of #2 (Buy). Investors can rest easy knowing that both stocks have an improving earnings outlook, as the Zacks Rank favors companies that have seen positive revisions to analyst estimates. However, value investors will be interested in much more than just that.

Value investors also try to analyze a wide range of traditional numbers and metrics to determine whether a company is undervalued at its current share price level.

The Style Score Value assessment incorporates a number of important fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and numerous other key statistics commonly used by value investors.

URBN currently has a forward P/E ratio of 11.79, while IDEXY has a forward P/E ratio of 20.34. We also note that URBN has a PEG ratio of 0.66. This popular number is similar to the widely used P/E ratio, but the PEG ratio also takes into account a company’s expected EPS growth rate. IDEXY currently has a PEG ratio of 2.04.

Another important valuation metric for URBN is its P/B ratio of 1.43. P/B is a method of comparing a stock’s market value to its book value, which is defined as total assets minus total liabilities. For comparison, IDEXY has a P/B ratio of 5.71.

These and several other metrics help URBN earn an A rating, while IDEXY receives a C rating.

Both URBN and IDEXY are impressive stocks with solid earnings prospects, but based on these valuation numbers, we believe URBN is the better value option right now.

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Urban Outfitters, Inc. (URBN): Free Stock Analysis Report

Industria de Diseno Textil SA (IDEXY): Free Stock Analysis Report

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