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Gap (GPS) Laps the Stock Market: Here's Why

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In the latest trading session, Gap (GPS - Free Report) closed at $21.94, marking a +1.95% move from the previous day. This change outpaced the S&P 500's 1.17% gain on the day. At the same time, the Dow added 0.88%, and the tech-heavy Nasdaq gained 1.4%.

The clothing chain's shares have seen an increase of 2.57% over the last month, surpassing the Retail-Wholesale sector's gain of 2.37% and the S&P 500's gain of 2.46%.

The investment community will be closely monitoring the performance of Gap in its forthcoming earnings report. The company is scheduled to release its earnings on May 30, 2024. The company's earnings per share (EPS) are projected to be $0.13, reflecting a 1200% increase from the same quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $3.28 billion, indicating a 0.1% increase compared to the same quarter of the previous year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $1.36 per share and a revenue of $14.84 billion, signifying shifts of -4.9% and -0.32%, respectively, from the last year.

Any recent changes to analyst estimates for Gap should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

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 witnessed a 0.42% increase. Gap is currently sporting a Zacks Rank of #1 (Strong Buy).

Looking at its valuation, Gap is holding a Forward P/E ratio of 15.79. This represents no noticeable deviation compared to its industry's average Forward P/E of 15.79.

Also, we should mention that GPS has a PEG ratio of 1.32. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Retail - Apparel and Shoes industry currently had an average PEG ratio of 1.32 as of yesterday's close.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 139, this industry ranks in the bottom 45% of all industries, numbering over 250.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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