The low valuation multiples for value stocks provide a margin of safety that growth stocks rarely offer. However, the challenge lies in determining whether these cheap assets are genuinely undervalued or simply on sale due to their potentially deteriorating business models.
This distinction between true value and value traps can challenge even the most skilled investors. Luckily for you, we started StockStory to help you uncover exceptional companies. Keeping that in mind, here are three value stocks offering compelling risk-reward profiles.
Urban Outfitters (URBN)
Forward P/E Ratio: 11.4x
Founded as a purveyor of vintage items, Urban Outfitters (NASDAQ: URBN) now largely sells new apparel and accessories to teens and young adults seeking on-trend fashion.
Why Are We Positive on URBN?
- Offensive push to build new stores and attack its untapped market opportunities is backed by its same-store sales growth
- Comparable store sales rose by 4.8% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
- Performance over the past three years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
At $73.59 per share, Urban Outfitters trades at 11.4x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Leidos (LDOS)
Forward P/E Ratio: 8x
Formed through the split of IT services company SAIC, Leidos (NYSE: LDOS) offers technology and engineering solutions such as military training systems for the defense, civil, and health markets.
Why Are We Fans of LDOS?
- Demand is greater than supply as the company’s 17.6% average backlog growth over the past two years shows it’s securing new contracts and accumulating more orders than it can fulfill
- Share repurchases over the last two years enabled its annual earnings per share growth of 22.4% to outpace its revenue gains
- Free cash flow margin increased by 5.1 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Leidos is trading at $101.31 per share, or 8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Boston Scientific (BSX)
Forward P/E Ratio: 12.9x
Founded in 1979 with a mission to advance less-invasive medicine, Boston Scientific (NYSE: BSX) develops and manufactures medical devices used in minimally invasive procedures across cardiovascular, urological, neurological, and gastrointestinal specialties.
Why Does BSX Stand Out?
- Average organic revenue growth of 15.7% over the past two years demonstrates its ability to expand independently without relying on acquisitions
- Additional sales over the last five years increased its profitability as the 24.2% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin expanded by 9.1 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Boston Scientific’s stock price of $44.16 implies a valuation ratio of 12.9x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
