Urban Outfitters: Great Valuation For Strong Sales Performance

Gary Alexander 34.41K Followers Follow Summary Urban Outfitters, Inc. remains undervalued despite robust Q2 results and stable comps growth, underperforming the S&P 500 year-to-date. Urban Outfitters' diverse brands, accelerating wholesale channel, and Nuuly’s subscription growth underpin a compelling investment thesis amid sector rebound. A fortress balance sheet with $945M cash and no debt enables aggressive buybacks and supports a 10.5x ex-cash forward P/E valuation. I maintain a buy rating, citing strong fundamentals, cheap valuation, and potential for further re-rating despite near-term markdown risks. felixmizioznikov/iStock Editorial via Getty Images One of the core learnings that we can take away from the Q2 earnings season is that US consumers have, on the whole, remained quite healthy on spending even amid macroeconomic choppiness and persistent inflation concerns. As This article was written by Gary Alexander 34.41K Followers Follow With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood. Analyst’s Disclosure: I/we have a beneficial long position in the shares of URBN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.