Urban Outfitters (URBN) is a top company that owns brands like Anthropologie, Free People, FP Movement, Urban Outfitters, and Nuuly Brands. It has hundreds of stores, mostly in the United States. Its Urban Outfitters brand has 262 stores, while its Anthropologie business has over 267 stores.
Urban Outfitters business has done well in the past few years, helped by growth in its all divisions. Its annual revenue jumped from $3.4 billion in 2020 to over $5.4 billion in the trailing twelve months (TTM). At the same time, the net income has moved from $168 million in 2019 to over $329 million last year.
Urban Outfitter’s stock price has jumped by 62% in the last decade, underperforming the S&P 500 and the Nasdaq 100 index.
It was trading at $52.5 on Thursday, while the HypeIndex metric rose to 367%.
Positive hype
Urban Outfitter’s positive hype has jumped as its stock price jumped. Its stock soared to $52.5, its highest level on record. It has jumped by over 55% from its lowest level this year.
The company’s growth has continued doing well. Its recent results showed that its quarterly revenue rose from $1.28 billion in Q3’23 to $1.36 billion in the last quarter. Its nine-month revenue rose to over $3.9 billion.
Most of its growth was driven by its Anthropologie and Free People. Urban Outfitters’ revenue dropped in the third quarter and in the first nine months of the year.
Analysts expect that Urban Outfitters group revenue will continue having single digit growth rates. It is expected to make $1.58 billion in this quarter and $5.49 billion in the full year.
Urban Outfitters is seen as an undervalued company since it has a price-to-earnings ratio of 12.9, lower than the sector median of $18 million. Its forward EV-to-EBITDA is 11, also lower than the sector median of 16.
Negative hype
Urban Outfitters' stock price at $52.5 is also higher than the current $46.47, a sign that analysts are cautious about it.
The company’s same-store sales growth is also not growing as it used to before, a sign that the momentum is fading.
Urban Outfitters inventories are rising, which is a risky situation. Its inventories increased by 10% or $72.3 million in the last quarter. Also, its costs are in a strong uptrend, which may hurt its profitability.
The company’s business is facing substantial competition from the likes of H&M, American Eagle, and Uniqlo. It is also seeing more competition from the likes of Amazon.
Urban Outfitters stock price analysis
The daily chart shows that the Urban Outfitters stock has been in a strong bullish trend in the past few weeks. It has moved above the key resistance level at $48.8, its highest level in July this year. This price was the upper side of the cup and handle pattern.
Urban Outfitters stock has also moved above the 50-day and 200-day moving averages. Also, oscillators like the Relative Strength Index (RSI) and the MACD indicators have all pointed upwards.
Therefore, because of the C&H pattern, there are odds that it will continue rising in the next few days. By measuring the depth of the cup, we can estimate that the stock will jump to about $62.
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