It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors.
Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.
Why Investors Should Pay Attention to This Value Stock
Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.
With more than 3,800 stores worldwide, The Gap, Inc. is a premier international specialty retailer offering a diverse range of clothing, accessories, and personal care products. It offers products for men, women, and children under the Old Navy, Gap, Banana Republic, Athleta, Intermix, and Hill City brands.
GPS sits at a Zacks Rank #3 (Hold), holds a Value Style Score of A, and has a VGM Score of A. Compared to the Retail - Apparel and Shoes industry's P/E of 11.6X, shares of Gap are trading at a forward P/E of 13.5X. GPS also has a PEG Ratio of 1.1, a Price/Cash Flow ratio of 7.8X, and a Price/Sales ratio of 0.2X.
Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. One analyst revised their earnings estimate upwards in the last 60 days for fiscal 2024. The Zacks Consensus Estimate has increased $0.03 to $0.64 per share. GPS has an average earnings surprise of 1007.2%.
GPS should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report