While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is The Gap . GPS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 12.57 right now. For comparison, its industry sports an average P/E of 16.72. Over the last 12 months, GPS's Forward P/E has been as high as 22.71 and as low as 11.10, with a median of 15.85.
We also note that GPS holds a PEG ratio of 1.34. 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 1.35 right now. GPS's PEG has been as high as 4.60 and as low as 1.06, with a median of 1.42, all within the past year.
Another valuation metric that we should highlight is GPS's P/B ratio of 3.26. The P/B ratio pits a stock's market value against 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 4.73. Within the past 52 weeks, GPS's P/B has been as high as 4.07 and as low as 1.55, with a median of 2.99.
Finally, we should also recognize that GPS has a P/CF ratio of 7.57. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. GPS's current P/CF looks attractive when compared to its industry's average P/CF of 14.63. GPS's P/CF has been as high as 14.18 and as low as 5.38, with a median of 7.57, all within the past year.
These are just a handful of the figures considered in The Gap's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GPS is an impressive value stock right now.
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Are Investors Undervaluing The Gap (GPS) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is The Gap . GPS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 12.57 right now. For comparison, its industry sports an average P/E of 16.72. Over the last 12 months, GPS's Forward P/E has been as high as 22.71 and as low as 11.10, with a median of 15.85.
We also note that GPS holds a PEG ratio of 1.34. 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 1.35 right now. GPS's PEG has been as high as 4.60 and as low as 1.06, with a median of 1.42, all within the past year.
Another valuation metric that we should highlight is GPS's P/B ratio of 3.26. The P/B ratio pits a stock's market value against 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 4.73. Within the past 52 weeks, GPS's P/B has been as high as 4.07 and as low as 1.55, with a median of 2.99.
Finally, we should also recognize that GPS has a P/CF ratio of 7.57. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. GPS's current P/CF looks attractive when compared to its industry's average P/CF of 14.63. GPS's P/CF has been as high as 14.18 and as low as 5.38, with a median of 7.57, all within the past year.
These are just a handful of the figures considered in The Gap's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GPS is an impressive value stock right now.