Is Urban Outfitters, Inc. overvalued or undervalued?

As of 10 October 2025, the valuation grade for Urban Outfitters, Inc. moved from attractive to very attractive, indicating a strong improvement in its perceived value. The company appears undervalued based on its current metrics, with a P/E ratio of 14, an EV to EBITDA of 9.25, and a PEG ratio of 0.32, all suggesting that the stock is trading at a discount relative to its earnings growth potential. In comparison to peers, Gap, Inc. has a P/E of 10.22, while Abercrombie & Fitch Co. stands at 15.96, further supporting the notion that Urban Outfitters is undervalued in its industry.
Despite recent short-term declines, Urban Outfitters has delivered impressive returns over longer periods, with a 1Y return of 89.99% compared to the S&P 500's 13.36%, and a remarkable 3Y return of 210.64% against the S&P 500's 81.39%. This performance reinforces the view that the stock is currently undervalued, offering significant potential for future growth.