Is Urban Outfitters, Inc. overvalued or undervalued?

As of 30 May 2025, the valuation grade for Urban Outfitters, Inc. has moved from attractive to very attractive. The company is currently undervalued based on its financial metrics. The P/E ratio stands at 14, while the industry average P/E is significantly lower at around 6.07 for peers like Carter's, Inc. Additionally, Urban Outfitters boasts a robust ROCE of 24.10% and an impressive ROE of 18.47%.
In comparison to its peers, Urban Outfitters has a PEG ratio of 0.32, indicating strong growth potential relative to its valuation. The EV to EBITDA ratio of 9.25 further supports the undervaluation thesis, especially when compared to Carter's, which has an EV to EBITDA of 4.85. Despite a recent decline in stock price over the past week, Urban Outfitters has significantly outperformed the S&P 500 over the past year, with a return of 47.40% compared to the index's 10.26%.