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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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Gap (GPS - Free Report) is a stock many investors are watching right now. GPS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 7.20, while its industry has an average P/E of 13.15. GPS's Forward P/E has been as high as 11.39 and as low as 6.82, with a median of 9.04, all within the past year.
GPS is also sporting a PEG ratio of 0.80. 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. GPS's industry has an average PEG of 1.36 right now. Over the past 52 weeks, GPS's PEG has been as high as 1.27 and as low as 0.76, with a median of 1.
Another valuation metric that we should highlight is GPS's P/B ratio of 1.28. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.35. Over the past year, GPS's P/B has been as high as 2.87 and as low as 1.21, with a median of 1.86.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GPS has a P/S ratio of 0.25. This compares to its industry's average P/S of 0.37.
Finally, investors will want to recognize that GPS has a P/CF ratio of 3.42. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 8.59. GPS's P/CF has been as high as 6.74 and as low as 3.24, with a median of 4.66, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Gap is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GPS feels like a great value stock at the moment.
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Is Gap (GPS) a Great Value Stock 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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Gap (GPS - Free Report) is a stock many investors are watching right now. GPS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 7.20, while its industry has an average P/E of 13.15. GPS's Forward P/E has been as high as 11.39 and as low as 6.82, with a median of 9.04, all within the past year.
GPS is also sporting a PEG ratio of 0.80. 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. GPS's industry has an average PEG of 1.36 right now. Over the past 52 weeks, GPS's PEG has been as high as 1.27 and as low as 0.76, with a median of 1.
Another valuation metric that we should highlight is GPS's P/B ratio of 1.28. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.35. Over the past year, GPS's P/B has been as high as 2.87 and as low as 1.21, with a median of 1.86.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GPS has a P/S ratio of 0.25. This compares to its industry's average P/S of 0.37.
Finally, investors will want to recognize that GPS has a P/CF ratio of 3.42. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 8.59. GPS's P/CF has been as high as 6.74 and as low as 3.24, with a median of 4.66, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Gap is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GPS feels like a great value stock at the moment.