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Gap (GPS) Surpasses Market Returns: Some Facts Worth Knowing

The latest trading session saw Gap (GPS) ending at $21.49, denoting a +1.27% adjustment from its last day's close. This move outpaced the S&P 500's daily gain of 0.25%. Meanwhile, the Dow experienced a rise of 0.17%, and the technology-dominated Nasdaq saw an increase of 0.23%.

The the stock of clothing chain has risen by 2.27% in the past month, lagging the Retail-Wholesale sector's gain of 6.04% and the S&P 500's gain of 7.08%.

The upcoming earnings release of Gap will be of great interest to investors. The company's earnings report is expected on May 30, 2024. The company's earnings per share (EPS) are projected to be $0.13, reflecting a 1200% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.28 billion, up 0.1% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.37 per share and revenue of $14.84 billion, indicating changes of -4.2% and -0.32%, respectively, compared to the previous year.

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Investors should also pay attention to any latest changes in analyst estimates for Gap. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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. Over the past month, the Zacks Consensus EPS estimate has shifted 0.63% upward. Currently, Gap is carrying a Zacks Rank of #1 (Strong Buy).

Looking at valuation, Gap is presently trading at a Forward P/E ratio of 15.54. This expresses a discount compared to the average Forward P/E of 16.24 of its industry.

One should further note that GPS currently holds a PEG ratio of 1.29. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Retail - Apparel and Shoes industry currently had an average PEG ratio of 1.29 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 84, which puts it in the top 34% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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The Gap, Inc. (GPS) : Free Stock Analysis Report

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Zacks Investment Research