Yahoo Finance Should Value Investors Buy The Gap (GPS) Stock?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
The Gap (GPS) is a stock many investors are watching right now. GPS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 14.25, while its industry has an average P/E of 15.29. Over the last 12 months, GPS's Forward P/E has been as high as 22.71 and as low as 10.88, with a median of 15.29.
Investors should also recognize that GPS has a P/B ratio of 2.83. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. GPS's current P/B looks attractive when compared to its industry's average P/B of 4.35. GPS's P/B has been as high as 4.07 and as low as 1.25, with a median of 2.03, over the past year.
Finally, investors should note that GPS has a P/CF ratio of 7.35. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 12.72. Over the past 52 weeks, GPS's P/CF has been as high as 14.18 and as low as 5.38, with a median of 7.16.
These are just a handful of the figures considered in The Gap's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GPS is an impressive value stock right now.
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The Gap, Inc. (GPS) : Free Stock Analysis Report
