Urban Outfitters Stock Price Drops Sharply, Here’s Why

Shares of Urban Outfitters (NASDAQ:URBN) have now lost more than 30% in less than two weeks on the back of the coronavirus selloff and the company’s lower-than-expected earnings for the fiscal fourth quarter.

Fundamental analysis: Coronavirus outbreak could disrupt their supply chain

The Philadelphia-based company reported adjusted earnings of $0.50 per share, lower than the $0.63 expected by the analysts, and significantly less than $0.83 per share a year ago. Revenue came in at $1.17 billion, slightly less than analysts’ estimates but higher than $1.13 billion reported a year ago.

The company said its operating income for the quarter was $38.58 million, which is 66.2% down from $114.21 million on a year-over-year basis.

On the coronavirus impact, the company said it creates supply chain uncertainty.

Technical analysis: Stock price approaching the key short-term support

The URBN stock price is now approaching the 30-month low at $19.63. As seen in the photo, the price action has contracted quickly from the levels around the $30 mark. The coronavirus-fueled selloff hasn’t helped at all as the company’s shares have already lost around 60% of its value compared to the summer of 2018.

If the multi-year support is broken, the door would be open for a move to test the record low of $16.19. On the upside, the strong resistance is located near the $24 mark, in case the bulls take control over the price action.

Summary

Shares of Urban Outfitters are threatening to create a new multi-year low in a major bearish development. The coronavirus selloff and the lower-than-expected earnings are pushing the shares below the $20 mark.