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Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.
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.
Gap (GAP)
With more than 3,600 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. Moreover, the company’s products include denim, tees, button-downs, khakis, and other trendy assortments as well as fitness and lifestyle products for training, sports, travel, yoga and other activities. Notably, the company offers its products through company-operated stores, franchise stores, websites, third-party arrangements, as well as catalogs. As of Nov 2, 2024, Gap had 3,603 stores in nearly 40 countries, of which 2,544 were company-operated.
GAP 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 16.3X, shares of Gap are trading at a forward P/E of 11.9X. GAP also has a PEG Ratio of 1.1, a Price/Cash Flow ratio of 8.4X, and a Price/Sales ratio of 0.6X.
A company's earnings performance is important for value investors as well. For fiscal 2025, one analyst revised their earnings estimate higher in the last 60 days for GAP, while the Zacks Consensus Estimate has increased $0.02 to $2.02 per share. GAP also holds an average earnings surprise of 101.2%.
With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding GAP to their portfolios.
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