NEW YORK (TheStreet) -- Shares of specialty retailer Urban Outfitters (URBN) got crushed Tuesday, plummeting more than 17% and reaching a low of $33.33. The shares eventually rebounded a bit, but still lost 15% and closing at $34.61.
The punishment came after the Philadelphia-based clothing retailer missed badly on its first-quarter earnings results. But if you're pondering buying Urban Outfitters' now-discounted stock, think twice. Then, just to be safe, think a third time, because things could get worse before they get better for the chain. Not to mention, analysts have now begun to pile on, suggesting that URBN "had it coming." Take a look at the chart.
URBN data by YCharts
At around $34 per share, not only is Urban Outfitters trading just 17% away from a new 52-week low of $27.89, the shares have plummeted some 30% since reaching their 52-week high of $47.25 in mid-March. This suggests that the bears are now in control of the stock, especially since the retailer just cut its fiscal-year earnings outlook due to weak gross margins.
There's just no scenario where URBN looks like a long trade. In fact, shorting the shares to $30 looks like a smart play. The likelihood of it notching a new 52-week low is just as compelling. Shorting the stock to $30 would deliver 11% gains. And even if its 52-week low offers some support in the $28 range, that still offers profits of around 17% on the short bet -- at least toward the July quarter. And there's a chance thatUrban Outfitters will disappoint with earnings then as well.