Yahoo Finance Should Value Investors Buy The Gap (GPS) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
The Gap (GPS) is a stock many investors are watching right now. GPS is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 14.44, while its industry has an average P/E of 16.66. Over the past year, GPS's Forward P/E has been as high as 22.71 and as low as 12.05, with a median of 15.85.
Another notable valuation metric for GPS is its P/B ratio of 3.58. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.97. Over the past year, GPS's P/B has been as high as 4.07 and as low as 1.44, with a median of 2.83.
Finally, investors should note that GPS has a P/CF ratio of 8.31. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.46. Over the past year, GPS's P/CF has been as high as 14.18 and as low as 5.38, with a median of 7.34.
Investors could also keep in mind Levi Strauss & Co. (LEVI), an Retail - Apparel and Shoes stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Levi Strauss & Co. are currently trading at a forward earnings multiple of 17.17 and a PEG ratio of 1.25 compared to its industry's P/E and PEG ratios of 16.66 and 1.52, respectively.
Over the past year, LEVI's P/E has been as high as 17.73, as low as 9.77, with a median of 11.80; its PEG ratio has been as high as 3.19, as low as 0.44, with a median of 1.34 during the same time period.
Additionally, Levi Strauss & Co. has a P/B ratio of 4.74 while its industry's price-to-book ratio sits at 4.97. For LEVI, this valuation metric has been as high as 4.87, as low as 2.62, with a median of 3.09 over the past year.
These are only a few of the key metrics included in The Gap and Levi Strauss & Co. strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, GPS and LEVI look like an impressive value stock at the moment.
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The Gap, Inc. (GPS) : Free Stock Analysis Report
Levi Strauss & Co. (LEVI) : Free Stock Analysis Report
