Yahoo Finance Should Value Investors Buy The Gap (GPS) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
One company to watch right now is The Gap (GPS). GPS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 15.50 right now. For comparison, its industry sports an average P/E of 16.39. 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 15.71.
Another notable valuation metric for GPS is its P/B ratio of 3.13. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.71. Within the past 52 weeks, GPS's P/B has been as high as 4.07 and as low as 1.25, with a median of 2.12.
Finally, our model also underscores that GPS has a P/CF ratio of 8.06. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.71. GPS's P/CF has been as high as 14.18 and as low as 5.38, with a median of 7.33, all within the past year.
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
