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Are Investors Undervaluing The Gap (GPS) Right Now?
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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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is The Gap (GPS - Free Report) . GPS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Another notable valuation metric for GPS is its P/B ratio of 1.84. The P/B ratio pits a stock's market value against 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 3.45. GPS's P/B has been as high as 2.49 and as low as 1.25, with a median of 1.66, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GPS has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.4.
Finally, our model also underscores that GPS has a P/CF ratio of 6.38. 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 13.40. Over the past 52 weeks, GPS's P/CF has been as high as 26.99 and as low as 5.38, with a median of 7.22.
Investors could also keep in mind Urban Outfitters (URBN - Free Report) , an Retail - Apparel and Shoes stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Urban Outfitters is trading at a forward earnings multiple of 9.65 at the moment, with a PEG ratio of 0.41. This compares to its industry's average P/E of 13.82 and average PEG ratio of 0.83.
Over the past year, URBN's P/E has been as high as 16.59, as low as 9.46, with a median of 11.51; its PEG ratio has been as high as 0.92, as low as 0.40, with a median of 1.22 during the same time period.
Furthermore, Urban Outfitters holds a P/B ratio of 1.51 and its industry's price-to-book ratio is 3.45. URBN's P/B has been as high as 1.79, as low as 1.18, with a median of 1.45 over the past 12 months.
These are only a few of the key metrics included in The Gap and Urban Outfitters strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, GPS and URBN look like an impressive value stock at the moment.
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Are Investors Undervaluing The Gap (GPS) Right Now?
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is The Gap (GPS - Free Report) . GPS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Another notable valuation metric for GPS is its P/B ratio of 1.84. The P/B ratio pits a stock's market value against 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 3.45. GPS's P/B has been as high as 2.49 and as low as 1.25, with a median of 1.66, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GPS has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.4.
Finally, our model also underscores that GPS has a P/CF ratio of 6.38. 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 13.40. Over the past 52 weeks, GPS's P/CF has been as high as 26.99 and as low as 5.38, with a median of 7.22.
Investors could also keep in mind Urban Outfitters (URBN - Free Report) , an Retail - Apparel and Shoes stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Urban Outfitters is trading at a forward earnings multiple of 9.65 at the moment, with a PEG ratio of 0.41. This compares to its industry's average P/E of 13.82 and average PEG ratio of 0.83.
Over the past year, URBN's P/E has been as high as 16.59, as low as 9.46, with a median of 11.51; its PEG ratio has been as high as 0.92, as low as 0.40, with a median of 1.22 during the same time period.
Furthermore, Urban Outfitters holds a P/B ratio of 1.51 and its industry's price-to-book ratio is 3.45. URBN's P/B has been as high as 1.79, as low as 1.18, with a median of 1.45 over the past 12 months.
These are only a few of the key metrics included in The Gap and Urban Outfitters strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, GPS and URBN look like an impressive value stock at the moment.