Urban Outfitters is a Philadelphia, Pennsylvania-based apparel and lifestyle retailer founded in 1970. The company has more than 700 retail stores across North America, Canada, and Europe and ventures in e-commerce too. Urban Outfitters is one of the company’s brands, including FP Movement Free People, Terrain Anthropologie, and BHLDN. In addition to the retail business, the company is into wholesale operation and operates a rental and restaurant business. The company’s customer base comprises mainly young adults, and the product categories include apparel for men and women, wedding costumes, shoes, home goods, and the outdoors. The NASDAQ listed company has the ticker URBN, and the Urban Outfitters stock price is $19.23 as of July 14, 2022, at the close of the day. The after-hours price of Urban Outfitters stock on the same day was $19.13.
Urban Outfitters Stock Price Indicators
Since the company’s performance impacts the share price, you must consider the worth of urban stock accordingly. Looking at the stock price in absolute terms will be a mistake. The company’s current performance is impressive as it recorded all-time high revenue in the first quarter. However, experts feel that the stock cannot soar to its full potential because of a lack of focus and tight margins. Among several of the company’s brands, the bulk sales generation happens from two key brand segments. Urban Outfitters caters to the young adults that form the primary customer group. The Anthropologie Group of women’s casual apparel and beauty and wellness products are the main money spinners.
Q1 Results Analysis
Q1 earnings of URBN were $0.33 per share against the expected $0.42 per share as hoped by the market analysts and experts monitoring the Urban Outfitters stock price. The company highlighted that higher inbound freight costs caused the earnings reduction. The explanation seems like an excuse. It’s a mystery how the company succumbed to the circumstances.
Another worrying trend is the sudden and significant inventory increase from $570 to $630 million three months earlier. The most concerning aspect of the 32% inventory jump is that it mainly comprises lower-growth brands that point to a potential yearly decline.
The company’s cash and marketable securities dropped to $258 million, leaving a cash balance of just $71 million. Given the slim margins and high freight costs, the company should have directed the spending towards improving COGS. The continuing headwind throughout the year will likely push the net profit further below 2021.
Stock Price Forecast
According to the 12-month forecast of the experts of CNN Business, the median target for the urban stock price should be $24. It would be an increase of 19.22% over the current price. The stock price could touch a high of $24 and fall as low as $17 during this period.
The Analysts’ advice is to hold Urban Outfitters stock. The ratings have been steady through June and will likely continue further.
