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Urban Outfitters Earnings: Momentum Continues Despite Industry Challenges; Shares Undervalued

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Urban Outfitters URBN overcame weakness in its namesake segment to post fiscal 2024 first-quarter results above our expectations. We expect to lift our $36 fair value estimate by a mid-single-digit percentage and view the shares as an attractive investment opportunity even after a low-double-digit percentage rally after the report. Although we rate Urban Outfitters as having no moat, we believe it has outperformed many others in a difficult environment for apparel retail, and its Anthropologie and Free People (including Movement) brands attract an upscale demographic. In addition, the firm has a clean balance sheet with about $5 per share in cash and investments and no long-term debt.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

David Swartz

Senior Equity Analyst
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David Swartz is a senior equity analyst in the consumer sector research group for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers consumer-focused companies in retail and apparel.

Before joining Morningstar in 2018, Swartz worked as a money manager and equity analyst for a family office in the Seattle area. He also worked as an analyst and fund manager for three equity hedge funds in the San Francisco Bay Area.

Swartz holds a bachelor’s degree in economics from the University of California at Berkeley and a master’s degree in economics from Yale University. He also holds a certificate in finance (investment management specialization) from UC Berkeley Extension.

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