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Zacks Investment Ideas feature highlights: The Gap and Workday
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For Immediate Release
Chicago, IL – December 26, 2023 – Today, Zacks Investment Ideas feature highlights The Gap (GPS - Free Report) and Workday (WDAY - Free Report) .
Momentum Alert: 2 Top-Ranked Stocks Breaking Out Now
A number of top Zacks Ranked stocks continue to set up for higher prices, even as the year nears an end. For those who are still trading as we enter the holiday season, I recommend checking out these two stocks that are forming momentum trading setups.
The Gap
Well-known for its timeless apparel and with 3,500 retail shops world-wide, The Gap has enjoyed an impressive performance YTD, as EPS have shown upside surprises for the last three quarters. Successful promotions and falling freight costs have increased margins, showing a 260-basis point expansion in the third quarter.
Analysts have been raising earnings estimates over the last two months, contributing to The Gap's Zacks Rank #1 (Strong Buy) rating.
Current quarter earnings estimates have been upgraded by 25%, while FY24 have jumped by 64%, and FY25 by 37%. Sales growth is expected to remain flat over the next two years though, so earnings growth is primarily expected to be driven by continued margin expansion.
Over the next 3-5 years EPS are forecast to grow by 12% annually.
After gapping significantly higher following Q3 earnings results, GPS stock has continued to drift higher. Now over the last two weeks, price action in The Gap stock has been building out a tradable consolidation pattern.
If the price can breakout and close above the $21.50 level, it would signal a technical buy signal. Alternatively, if the price can't hold above there, or trades below the $20.50 level of support, investors may want to look for opportunities elsewhere.
Workday
Workday is a cloud-based software company specializing in enterprise resource planning (ERP) and human capital management (HCM) solutions. Workday's platform is designed to assist organizations with various aspects of workforce management, including HR, payroll, finance, and planning.
The company's innovative cloud-based approach allows for scalable and flexible solutions, catering to the evolving needs of businesses.
Workday expects steady sales growth over the next two years, with a forecast of 16% YoY increases over the next two years. EPS are also expected to grow at a nice pace, with analysts projecting annual growth of 26.5% over the next 3-5 years.
WDAY also has a Zacks Rank #2 (Buy) rating, reflecting modest increases in its earnings estimates. Current quarter earnings estimates have been revised higher by 1.4% and FY24 by 2.2% over the last two months.
Like The Gap, Workday stock experienced a heft gap higher following Q3 earnings and have been trading sideways to higher since then. These are fantastic momentum trading setups.
If WDAY stock can trade above the $276.50 level, the price should rally to new highs. However, if it breaks out and reverses immediately, or moves below the $270.50 level of support, the setup is invalid and investors may want to wait for another buy signal.
Bottom Line
While many traders may have already wrapped up their year, there are still opportunities in the market. However, if 2023 has been good to you already, it may be wise to size down so not to give back any of your well-earned gains.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: The Gap and Workday
For Immediate Release
Chicago, IL – December 26, 2023 – Today, Zacks Investment Ideas feature highlights The Gap (GPS - Free Report) and Workday (WDAY - Free Report) .
Momentum Alert: 2 Top-Ranked Stocks Breaking Out Now
A number of top Zacks Ranked stocks continue to set up for higher prices, even as the year nears an end. For those who are still trading as we enter the holiday season, I recommend checking out these two stocks that are forming momentum trading setups.
The Gap
Well-known for its timeless apparel and with 3,500 retail shops world-wide, The Gap has enjoyed an impressive performance YTD, as EPS have shown upside surprises for the last three quarters. Successful promotions and falling freight costs have increased margins, showing a 260-basis point expansion in the third quarter.
Analysts have been raising earnings estimates over the last two months, contributing to The Gap's Zacks Rank #1 (Strong Buy) rating.
Current quarter earnings estimates have been upgraded by 25%, while FY24 have jumped by 64%, and FY25 by 37%. Sales growth is expected to remain flat over the next two years though, so earnings growth is primarily expected to be driven by continued margin expansion.
Over the next 3-5 years EPS are forecast to grow by 12% annually.
After gapping significantly higher following Q3 earnings results, GPS stock has continued to drift higher. Now over the last two weeks, price action in The Gap stock has been building out a tradable consolidation pattern.
If the price can breakout and close above the $21.50 level, it would signal a technical buy signal. Alternatively, if the price can't hold above there, or trades below the $20.50 level of support, investors may want to look for opportunities elsewhere.
Workday
Workday is a cloud-based software company specializing in enterprise resource planning (ERP) and human capital management (HCM) solutions. Workday's platform is designed to assist organizations with various aspects of workforce management, including HR, payroll, finance, and planning.
The company's innovative cloud-based approach allows for scalable and flexible solutions, catering to the evolving needs of businesses.
Workday expects steady sales growth over the next two years, with a forecast of 16% YoY increases over the next two years. EPS are also expected to grow at a nice pace, with analysts projecting annual growth of 26.5% over the next 3-5 years.
WDAY also has a Zacks Rank #2 (Buy) rating, reflecting modest increases in its earnings estimates. Current quarter earnings estimates have been revised higher by 1.4% and FY24 by 2.2% over the last two months.
Like The Gap, Workday stock experienced a heft gap higher following Q3 earnings and have been trading sideways to higher since then. These are fantastic momentum trading setups.
If WDAY stock can trade above the $276.50 level, the price should rally to new highs. However, if it breaks out and reverses immediately, or moves below the $270.50 level of support, the setup is invalid and investors may want to wait for another buy signal.
Bottom Line
While many traders may have already wrapped up their year, there are still opportunities in the market. However, if 2023 has been good to you already, it may be wise to size down so not to give back any of your well-earned gains.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.