Yahoo Finance Here's Why Gap (GPS) is a Strong Value Stock
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.
Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.
Why Investors Should Pay Attention to This Value Stock
Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks.
Gap (GPS)
With more than 3,500 stores worldwide, The Gap, Inc. is a premier international specialty retailer offering a diverse range of clothing, accessories, and personal care products. It offers products for men, women, and children under the Old Navy, Gap, Banana Republic, Athleta, Intermix, and Hill City brands. Moreover, the company’s products include denim, tees, button-downs, khakis, and other trendy assortments as well as fitness and lifestyle products for training, sports, travel, yoga and other activities. Notably, the company offers its products through company-operated stores, franchise stores, websites, third-party arrangements, as well as catalogs. As of May 4, 2024, Gap had 3,571 stores in more than 40 countries, of which 2,554 were company-operated and 1,017 were franchise outlets.
GPS is a Zacks Rank #1 (Strong Buy) stock, with a Value Style Score of A and VGM Score of A. Shares are currently trading at a forward P/E of 14.9X for the current fiscal year compared to the Retail - Apparel and Shoes industry's P/E of 16.3X. Additionally, GPS has a PEG Ratio of 4.4 and a Price/Cash Flow ratio of 9X. Value investors should also note GPS' Price/Sales ratio of 0.7X.
Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Seven analysts revised their earnings estimate upwards in the last 60 days for fiscal 2025. The Zacks Consensus Estimate has increased $0.38 to $1.74 per share. GPS has an average earnings surprise of 202.7%.
With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding GPS to their portfolios.
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The Gap, Inc. (GPS) : Free Stock Analysis Report
