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Urban Outfitters, Inc. (URBN) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Urban Outfitters, Inc. (URBN)

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Intrinsic Value (DCF)

Current$70.56
→
Intrinsic$93.00
+32%
$60.64$93.00$154.44
Market implies 14% growth for 5 years
DCF analysis suggests URBN could have 32% upside at 21% growth — verify assumptions match your view.
At $71, the market prices in 14% annual cash flow growth — a moderate expectation aligned with historical trends (21%).
Range: Bear $61 → Bull $154. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →17%19%21%23%
8%$115$126$137$148
10%$78$86$93$101
12%$58$63$69$75
14%$45$49$54$58

Bull Case

  • Bull case ($154) offers 119% upside at 25% growth, 9% discount
  • 24% margin of safety vs. base case estimate
  • Market-implied growth (14%) ≤ historical CAGR (21%)

Bear Case

  • Bear case ($61) implies 14% downside at 16% growth, 12% discount
  • Using 21% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$386.22M
Year 2$465.77M
Year 3$561.71M
Year 4$677.40M
Year 5$816.93M
Terminal$12.02B

📐 Model Inputs

Growth Rate20.6%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$320.25MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is URBN stock undervalued or overvalued?
🟡 FAIRLY VALUED

URBN trades at $70.56, within 10% of our $90.71 intrinsic value estimate. At 10.0% WACC and 20.6% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $56.55 (bear) to $141.01 (bull).

What is URBN's intrinsic value?

Using a 5-year DCF model: Base FCF of $320M, projected at 20.6% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $808M net debt and dividing by 0.09B shares: Bear $56.55 | Base $90.71 | Bull $141.01. Current price $70.56 implies +12% to base case.

How is URBN's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.6% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($9.38B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.