Should Value Investors Buy The Gap (GAP) 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.Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.The Gap (GAP) is a stock many investors are watching right now. GAP is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 11.12. This compares to its industry's average Forward P/E of 19.76. Over the last 12 months, GAP's Forward P/E has been as high as 21.56 and as low as 9.98, with a median of 14.25.GAP is also sporting a PEG ratio of 1. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GAP's industry has an average PEG of 1.58 right now. Over the past 52 weeks, GAP's PEG has been as high as 4.60 and as low as 1, with a median of 1.36.We should also highlight that GAP has a P/B ratio of 2.87. 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. GAP's current P/B looks attractive when compared to its industry's average P/B of 6.78. Over the past 12 months, GAP's P/B has been as high as 4.07 and as low as 2.48, with a median of 2.98.Finally, we should also recognize that GAP has a P/CF ratio of 6.90. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. GAP's current P/CF looks attractive when compared to its industry's average P/CF of 18.11. Over the past year, GAP's P/CF has been as high as 14 and as low as 5.85, with a median of 7.30.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.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>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 ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks