3 Reasons Why Growth Investors Shouldn't Overlook Urban Outfitters (URBN)

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying those that can fulfill their potential is challenging [1] Group 1: Growth Stock Characteristics - The Zacks Growth Style Score helps identify promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - Urban Outfitters (URBN) is highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is crucial for attracting investor attention, with double-digit growth seen as a strong indicator of future stock price gains [3] - Urban Outfitters has a historical EPS growth rate of 49.2%, with projected EPS growth of 29% this year, significantly outperforming the industry average of 12.1% [4] Group 3: Cash Flow Growth - High cash flow growth is essential for growth-oriented companies, allowing them to fund new projects without relying on external financing [5] - Urban Outfitters currently has a year-over-year cash flow growth of 22%, compared to an industry average of -3.2% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 9.1%, exceeding the industry average of 7.6% [6] Group 4: Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with near-term stock price movements [7] - Urban Outfitters has seen upward revisions in current-year earnings estimates, with the Zacks Consensus Estimate increasing by 0.9% over the past month [8] Group 5: Conclusion - Urban Outfitters has achieved a Growth Score of A and a Zacks Rank 2, indicating its potential as an outperformer and a solid choice for growth investors [10]