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Gap (GPS) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Gap (GPS) closed at $18.27, marking a -0.87% move from the previous day. This move lagged the S&P 500's daily gain of 0.08%. Meanwhile, the Dow lost 0.56%, and the Nasdaq, a tech-heavy index, lost 0.42%.

Heading into today, shares of the clothing chain had gained 11.9% over the past month, outpacing the Retail-Wholesale sector's loss of 3.94% and the S&P 500's gain of 0.22% in that time.

Wall Street will be looking for positivity from Gap as it approaches its next earnings report date. In that report, analysts expect Gap to post earnings of -$0.12 per share. This would mark a year-over-year decline of 142.86%. Our most recent consensus estimate is calling for quarterly revenue of $4.53 billion, up 2.46% from the year-ago period.

GPS's full-year Zacks Consensus Estimates are calling for earnings of $1.35 per share and revenue of $16.69 billion. These results would represent year-over-year changes of +163.98% and +20.93%, respectively.

Investors might also notice recent changes to analyst estimates for Gap. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Gap is holding a Zacks Rank of #5 (Strong Sell) right now.

Looking at its valuation, Gap is holding a Forward P/E ratio of 13.66. For comparison, its industry has an average Forward P/E of 12.64, which means Gap is trading at a premium to the group.

Meanwhile, GPS's PEG ratio is currently 1.14. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GPS's industry had an average PEG ratio of 0.91 as of yesterday's close.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 77, which puts it in the top 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow GPS in the coming trading sessions, be sure to utilize

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