This Apparel Stock Is Way Cheaper Than Nike
Key Points
Urban Outfitters' stock has been up nearly 50% in 2025.
The apparel retail company has a price-to-earnings ratio more than 50% cheaper than Nike’s.
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In 2024, both Urban Outfitters (NASDAQ: URBN) and Nike (NYSE: NKE) appointed new CEOs, with ambitious goals for their respective companies. However, each company's stock has taken opposite paths, with Urban Outfitters consistently gaining in shareholder value and market cap, while Nike suffers the opposite.
The apparel retail company's stock was performing well before the hire of CEO Shea Jensen in February 2023, as its stock has surged 238% over the last three years (as of Dec. 21), while the Swoosh brand's stock has plummeted 50% within that same period.
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Urban Outfitters is positioning itself as a growth platform for Nike
Following its recent CEO hire of Elliott Hill in October 2024, Nike increased its focus on direct-to-consumer (DTC) retail, aiming to generate more revenue through its flagship apparel stores and SNKRS app, rather than selling among competitors at retail stores. However, the company's DTC sales have dropped in consecutive fiscal quarters, including in its latest Q2 2026 earnings report on Dec. 18, where it reported an 8% decrease.
The sports apparel company could be pivoting back to selling more products at external retailers, as it partnered with Urban Outfitters in May 2025, for the apparel retailer's launch of "On Rotation," an immersive retail experience. Along with Nike, this in-store experience partners with popular brands to create rotating fashion themes targeting Gen Z consumers. On Rotation and an increased focus on subscription-based infrastructure have been a success for UO in 2025.
Nike's stock price has outpaced its earnings growth, resulting in a trailing price-to-earnings (P/E) ratio of 34.33. Compare that to Urban Outfitters' much cheaper trailing P/E of 15.40. With consistent earnings growth and innovative approaches to its business model, Urban Outfitters can be a cheaper apparel stock to invest in long-term.
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Adé Hennis has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy.
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