Trade-Ideas: Gap (GPS) Is Today's Post-Market Laggard Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Gap ( GPS) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Gap as such a stock due to the following factors:

  • GPS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $143.8 million.
  • GPS is down 3.3% today from today's close.

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More details on GPS:

The Gap, Inc. operates as an apparel retail company. It offers apparel, accessories, and personal care products for men, women, children, and babies under the Gap, Old Navy, Banana Republic, Piperlime, Athleta, and Intermix brands. The stock currently has a dividend yield of 1.4%. GPS has a PE ratio of 16.9. Currently there are 10 analysts that rate Gap a buy, 2 analysts rate it a sell, and 15 rate it a hold.

The average volume for Gap has been 3.1 million shares per day over the past 30 days. Gap has a market cap of $20.3 billion and is part of the services sector and retail industry. The stock has a beta of 1.34 and a short float of 2.3% with 1.67 days to cover. Shares are up 37.5% year to date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Gap as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 51.06% and other important driving factors, this stock has surged by 57.44% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GPS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • GAP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GAP INC increased its bottom line by earning $2.32 versus $1.57 in the prior year. This year, the market expects an improvement in earnings ($2.74 versus $2.32).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 42.9% when compared to the same quarter one year prior, rising from $233.00 million to $333.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 15.9%. Since the same quarter one year prior, revenues slightly increased by 6.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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