Urban Outfitters gapped up on an earnings beat on May 22 and formed a flat base that has a buy point of 75.80, according to IBD MarketSurge. This is an early-stage base that can net higher gains. Moreover, the buy point is the stock's all-time high. Urban Outfitters stock is Monday's selection for IBD 50 Growth Stocks To Watch.
Accelerating Growth
Sales and earnings for Urban Outfitters have accelerated over the past two quarters. Sales in the first quarter rose 11% to $1.33 billion. Analysts polled by FactSet had estimated sales of $1.29 billion for the quarter. Earnings per share of $1.16 surpassed Wall Street's view of 84 cents and represented a 68% increase from the prior-year quarter. Same-store sales also beat estimates of 3.6% growth with a 4.8% increase from the prior year. During the quarter ended in April, the company opened 13 new retail locations.
Urban Outfitters operates apparel stores in the U.S., Canada and Europe, as well as online, under several brands including Anthropologie, Free People, FP Movement, Urban Outfitters and Nuuly. First-quarter results reflected "positive sales growth and improved profitability across all brands and segments," Chief Executive Officer Richard Hayne said.
Urban Outfitters ranks first in the apparel and accessories group, according to IBD Stock Checkup. But the group lags, holding 179th place among Investor's Business Daily's 197 industry groups.
The stock's Composite Rating sits at 94 while the Earnings Per Share Rating is nearly ideal at 98. The Relative Strength Rating of 95 shows Urban Outfitters stock has outperformed the vast majority of other stocks in the IBD database over the past 52 weeks. The rating has also improved from 86 a year ago.
For the full year, analysts estimate that company earnings per share will rise 23% to $5.02. In 2027, they expect earnings per share of $5.52, or 10% growth.
Urban Outfitters Stock: Strong Fund Ownership
The stock holds an Accumulation/Distribution Rating of B-. That indicates that mutual funds have been adding it to their holdings over the past 13 weeks. The Up/Down Volume Ratio of 1.2 also shows strong demand for the stock over the past 50 trading days.
Mutual funds own 66% of outstanding shares. More funds have been net buyers of the stock over the past three quarters. In the IBD mutual fund index, the Fidelity Contrafund (FCNTX) holds shares of Urban Outfitters stock.
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