The shares of DaVita Inc. (NYSE:DVA) and Urban Outfitters, Inc. (NASDAQ:URBN) were among the active stocks of the last trading sessions. DaVita Inc. (NYSE:DVA) soared to 0.86% closing at the price of $68.95 whereas the shares of Urban Outfitters, Inc. (NASDAQ:URBN) declined -2.67% with the decrease of -1.01 points closing at the price of $36.87. DaVita Inc. has currently increase 8.16% in its stock over the period of 6-months while its rival Urban Outfitters, Inc. subtracted -3.86% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of DaVita Inc. (NYSE:DVA) is 8.8% while the ROI of Urban Outfitters, Inc. (NASDAQ:URBN) is 13.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, DVA’s EBITDA Margin is 9.48 whereas URBN’s is 7.56.
Both the profitability ratios suggest a mixed sentiment for DaVita Inc. (NYSE:DVA) and Urban Outfitters, Inc. (NASDAQ:URBN).
EPS & Surprise Factor
DaVita Inc. (NYSE:DVA) reported $1.05/share EPS for the previous quarter where analysts were predicting an EPS to be $0.97/share Thus beating the analyst Estimates with a Surprise Factor of 8.2 Percent. While, Urban Outfitters, Inc. (NASDAQ:URBN) reported EPS of $0.84/share in the last quarter. The analysts projected EPS of $0.77/share depicting a Surprise of 9.1 Percent.
Taking a look at Earnings per Share, Urban Outfitters, Inc. tends to be beating the analyst estimates more than DaVita Inc.. so URBN is more profitable than DVA.
Technical Analysis of DaVita Inc. & Urban Outfitters, Inc.
Moving average convergence divergence (MACD) shows that DaVita Inc. (NYSE:DVA) is on a PRICE RELATIVITY trend While Urban Outfitters, Inc. (NASDAQ:URBN) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the DaVita Inc. was in BEARISH territory and Urban Outfitters, Inc. was in BEARISH territory.
DVA’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While URBN’s candle is BEARISH with HIGH.
EPS Growth Rate: DVA’s 23% versus URBN’s 15.34%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of DaVita Inc. (NYSE:DVA) is predicted at 23% while Urban Outfitters, Inc. (NASDAQ:URBN) stands at 15.34%. These numbers suggest that DVA is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of DVA stands at 1.9 while URBN is at 2.8 whereas the debt ratio of the prior is 2.32 while the debt ratio of the later is 0.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 1.9 for DVA and 2.6 for URBN which means DVA has Buy rating whereas URBN has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for DVA is $80.75 which is 14.61% of its current price while URBN has price target of 49.5 which is 25.52% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
DVA currently has price to earning P/E ratio of 27.12 whereas URBN has 16.53 while the forward P/E ratio for the prior stands at 13.79 and for the later it depicts the value of 12.77.
The price to Book P/B for DVA is 2.77, Price to Sale is at 1.04 and for URBN these ratios stand at 2.78 and 1.04.