Urban Outfitters Inc. Common Stock (URBN)

FairStock Score: 60/100 — STEADY

Key Financials

Strengths

• Generates $216 million in annual free cash flow (3.3% yield on market cap)
• Solid return on equity of 17.6% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.44, providing financial flexibility
• Established organization with 11,780 employees providing operational scale

AI Analysis

Urban Outfitters Inc. Common Stock is a small-cap consumer cyclical company valued at $6.5 billion. The business generates $6.2 billion in annual revenue with a 1.6% net margin and $216 million in free cash flow. From a quality standpoint, Urban shows healthy Altman Z-Score of 3.2 and adequate 18% ROE. On valuation, the stock is attractively valued at 14.6x earnings, with trades above its Graham Number with a negative 22% margin. Growth dynamics show revenue growing at 10.1% and profit growth of -20.0%. Our composite FairStock Score of 60/100 reflects above-average fundamentals overall. This combination of reasonable valuation, solid returns, and conservative leverage makes it worth a closer look for value-oriented portfolios.

Bull Case

The market underappreciates Urban's consistent 18% ROE at just 15x earnings—a re-rating toward sector peers could unlock 30-50% upside. With $216 million in annual free cash flow (3.3% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the consumer cyclical space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer