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Are Investors Undervaluing The Gap (GPS) Right Now?
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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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is The Gap (GPS - Free Report) . GPS is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 13.36, which compares to its industry's average of 16.64. Over the past 52 weeks, GPS's Forward P/E has been as high as 22.71 and as low as 12.61, with a median of 15.85.
Another notable valuation metric for GPS is its P/B ratio of 3.33. The P/B is a method of comparing a stock's market value to 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 4.78. GPS's P/B has been as high as 4.07 and as low as 1.54, with a median of 2.88, over the past year.
Finally, investors will want to recognize that GPS has a P/CF ratio of 7.74. 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. GPS's P/CF compares to its industry's average P/CF of 14.79. Over the past 52 weeks, GPS's P/CF has been as high as 14.18 and as low as 5.38, with a median of 7.49.
Urban Outfitters (URBN - Free Report) may be another strong Retail - Apparel and Shoes stock to add to your shortlist. URBN is a # 2 (Buy) stock with a Value grade of A.
Urban Outfitters is trading at a forward earnings multiple of 12.66 at the moment, with a PEG ratio of 1.11. This compares to its industry's average P/E of 16.64 and average PEG ratio of 1.55.
URBN's Forward P/E has been as high as 13.39 and as low as 9.40, with a median of 11.26. During the same time period, its PEG ratio has been as high as 1.13, as low as 0.40, with a median of 0.61.
Furthermore, Urban Outfitters holds a P/B ratio of 2.04 and its industry's price-to-book ratio is 4.78. URBN's P/B has been as high as 2.07, as low as 1.44, with a median of 1.73 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that The Gap and Urban Outfitters are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GPS and URBN feels like a great value stock at the moment.
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Are Investors Undervaluing The Gap (GPS) 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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is The Gap (GPS - Free Report) . GPS is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 13.36, which compares to its industry's average of 16.64. Over the past 52 weeks, GPS's Forward P/E has been as high as 22.71 and as low as 12.61, with a median of 15.85.
Another notable valuation metric for GPS is its P/B ratio of 3.33. The P/B is a method of comparing a stock's market value to 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 4.78. GPS's P/B has been as high as 4.07 and as low as 1.54, with a median of 2.88, over the past year.
Finally, investors will want to recognize that GPS has a P/CF ratio of 7.74. 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. GPS's P/CF compares to its industry's average P/CF of 14.79. Over the past 52 weeks, GPS's P/CF has been as high as 14.18 and as low as 5.38, with a median of 7.49.
Urban Outfitters (URBN - Free Report) may be another strong Retail - Apparel and Shoes stock to add to your shortlist. URBN is a # 2 (Buy) stock with a Value grade of A.
Urban Outfitters is trading at a forward earnings multiple of 12.66 at the moment, with a PEG ratio of 1.11. This compares to its industry's average P/E of 16.64 and average PEG ratio of 1.55.
URBN's Forward P/E has been as high as 13.39 and as low as 9.40, with a median of 11.26. During the same time period, its PEG ratio has been as high as 1.13, as low as 0.40, with a median of 0.61.
Furthermore, Urban Outfitters holds a P/B ratio of 2.04 and its industry's price-to-book ratio is 4.78. URBN's P/B has been as high as 2.07, as low as 1.44, with a median of 1.73 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that The Gap and Urban Outfitters are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GPS and URBN feels like a great value stock at the moment.