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Gap (GPS): The Perfect Mix of Value and Rising Earnings Estimates?

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Value investing is always a very popular strategy, and for good reason. After all, who doesn’t want to find stocks that have low PEs, solid outlooks, and decent dividends?

Fortunately for investors looking for this combination, we have identified a strong candidate which may be an impressive value; Gap, Inc. (GPS - Free Report) .

Gap in Focus

GPS may be an interesting play thanks to its forward PE of 14.26, its P/S ratio of 0.75, and its decent dividend yield of 3.12%. These factors suggest that Gap is a pretty good value pick, as investors have to pay a relatively low level for each dollar of earnings, and that GPS has decent revenue metrics to back up its earnings.

Gap, Inc. (The) PE Ratio (TTM)

 

 

 

 

 

 

 

Gap, Inc. (The) PE Ratio (TTM) | Gap, Inc. (The) Quote

But before you think that Gap is just a pure value play, it is important to note that it has been seeing solid activity on the earnings estimate front as well. For current year earnings, the consensus has gone up by 3.5% in the past 60 days, thanks to eight upward revisions in the past two months compared to none lower.

This estimate strength is actually enough to push GPS to a Zacks Rank #2 (Buy), suggesting it is poised to outperform. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

So really, Gap is looking great from a number of angles thanks to its PE below 20, a P/S ratio below one, and a strong Zacks Rank, meaning that this company could be a great choice for value investors at this time.

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