Are Investors Undervaluing The Gap (GAP) 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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.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.One company to watch right now is The Gap (GAP). GAP is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 9.94, which compares to its industry's average of 15.85. Over the past year, GAP's Forward P/E has been as high as 21.56 and as low as 8.99, with a median of 11.81.We also note that GAP holds a PEG ratio of 0.90. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GAP's industry has an average PEG of 1.27 right now. Over the past 52 weeks, GAP's PEG has been as high as 4.60 and as low as 0.81, with a median of 1.21.We should also highlight that GAP has a P/B ratio of 2.58. Investors use the P/B ratio to look at a stock's market value versus 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 5.09. Over the past 12 months, GAP's P/B has been as high as 4.07 and as low as 2.25, with a median of 2.92.Finally, investors will want to recognize that GAP has a P/CF ratio of 6.39. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 14.02. Within the past 12 months, GAP's P/CF has been as high as 10.56 and as low as 5.57, with a median of 6.96.These figures are just a handful of the metrics value investors tend to look at, but they help show that The Gap is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GAP feels like a great value stock at the moment.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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 The Gap, Inc. (GAP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks