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Gap (GPS) Stock Declines While Market Improves: Some Information for Investors

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The latest trading session saw Gap (GPS - Free Report) ending at $23.14, denoting a -1.45% adjustment from its last day's close. The stock trailed the S&P 500, which registered a daily gain of 0.15%. Meanwhile, the Dow lost 0.02%, and the Nasdaq, a tech-heavy index, added 0.32%.

Shares of the clothing chain have appreciated by 8.5% over the course of the past month, outperforming the Retail-Wholesale sector's gain of 1.12% and the S&P 500's gain of 1.65%.

The investment community will be closely monitoring the performance of Gap in its forthcoming earnings report. It is anticipated that the company will report an EPS of $0.12, marking a 1100% rise compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $3.28 billion, down 0.02% from the year-ago period.

GPS's full-year Zacks Consensus Estimates are calling for earnings of $1.36 per share and revenue of $14.84 billion. These results would represent year-over-year changes of -4.9% and -0.34%, respectively.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Gap. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 last 30 days, the Zacks Consensus EPS estimate has moved 5.56% higher. At present, Gap boasts a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that Gap has a Forward P/E ratio of 17.3 right now. This valuation marks a premium compared to its industry's average Forward P/E of 15.28.

Also, we should mention that GPS has a PEG ratio of 1.44. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Retail - Apparel and Shoes stocks are, on average, holding a PEG ratio of 1.18 based on yesterday's closing prices.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 171, this industry ranks in the bottom 33% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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