The Stock Of The Week: The Gap Inc. (GPS)

As of Friday close, The Gap Inc.’s (NYSE:GPS) stock was up $0.16, moving up 1.33 percent to $12.15. The average number of shares traded per day over the past five days has been 7,736,740 shares. 1 time new highs have been achieved over the past 5 days, with a -$0.54 fall in that time frame. In the last twenty days, the average volume was 9,604,295, while in the previous 50 days, it was 10,072,979.

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Since last month, GPS stock retreated -15.98%. Shares of the company fell to $11.07 on 04/22/22, the lowest level in the past month. A 52-week high of $37.63 was reached on 01/05/22 after having rallying from a 52-week low of $11.07. Since the beginning of this year, GPS’s stock price has dropped by -31.16% or -$5.50, and marked a new high 3 times. However, the stock has declined by -67.71% since its 52-week high.

The Gap Inc. (GPS) last reported insider trading activity 4 days ago on May 10. Breitbard Mark, the President & CEO, Gap Brand of the company, disposed of 16,755 shares for $12.51 on May 10. It resulted in a $209,565 divestment by the insider. Breitbard Mark sold 7,311 shares at an average price of $17.01 on Dec 21. The insider now owns 53,893 shares following the transaction. On Nov 16, CEO Gap, Inc. Syngal Sonia sold 6,945 shares at $24.71 apiece. The transaction was valued at $171,630.

Valuation Metrics

Right now, The Gap Inc. (GPS) has a P/E ratio of about 20.12. The stock’s beta is 1.66. Besides these, the trailing price-to-sales (P/S) ratio of 0.27, the price-to-book (PB) ratio of 1.66.

The latest dividend of $0.15 per share was paid out, remained unchanged from last year’s $0.15. On Thursday February 24 2022, a $0.03 dividend increase was announced.

Financial Health

In the three months ended October 30, The Gap Inc.’s quick ratio stood at 0.50, while its current ratio was 1.30, showing that the company is not able to pay off its debt. According to company report, the long-term debt-to-equity ratio for the quarter ending October 30 was 0.55. On the profitability front, the trailing twelve-month gross margin is 39.80% percent. In the year ended October 30, operating margins totaled 2.90%. Based on annual data, GPS earned $6.64 billion in gross profit and brought in $16.67 billion in revenue.

A company’s management is another factor that investors consider when determining the profitability of an investment. In the past year, return on investment (ROI) was 9.50%. Return on equity (ROE) for the past 12 months was 9.00%.

In The Gap Inc.’s quarter-end financial report for October 30, it reported total debt of $1.48 billion. According to the earnings report, the company had a higher net income in the recent quarter than it did in the previous quarter. GPS’s revenue rose 666.53% to $3.94 billion during the quarter, while net income inched up to $1.66 billion. While analysts expected The Gap Inc. to report $0.5 quarterly earnings, the actual figure was $0.27 per share, beating the consensus estimate by -46.00%. During the quarter, the company generated $143.0 million in EBITDA. The liabilities of The Gap Inc. were 10.04 billion at the end of its most recent quarter ended October 30, and its total debt was $6.39 billion. The value of shareholders’ equity is $369.78 million.

Technical Picture

This quick technical analysis looks at The Gap Inc.’s (GPS) price momentum. With a historical volatility rate of 54.11%, the RSI 9-day stood at 42.67% on 13 May.

With respect to its five-day moving average, the current The Gap Inc. price is down by -4.26% percent or -$0.54. At present, GPS shares trade -13.89% below its 20-day simple moving average and -27.20% percent below its 100-day simple moving average. However, the stock is currently trading approximately -14.74% below its SMA50 and -58.02% below its SMA200.

Stochastic coefficient K was 27.69% and Stochastic coefficient D was 25.08%, while ATR was 0.78. Given the Stochastic reading of 38.39% for the 14-day period, the RSI (14) reading has been calculated as 42.41%. As of today, the MACD Oscillator reading stands at -0.61, while the 14-day reading stands at -0.68.

Analyst Ratings

Guggenheim upgraded its rating on The Gap Inc. (NYSE: GPS) to a Buy in a note to investors on April 25, 2022. The analysts firm previously had a Neutral rating on the stock.The Gap Inc. (GPS) has been rated Hold by analysts. According to 1 brokerage firm, GPS is a sell, and 15 firms recommend it is a Hold. There are 2 analysts who say the stock is underweight. A total of 0 analysts rate The Gap Inc. stock as buy, with 4 recommending it as overweight.

With a median target price of $14.00, the current consensus forecast for the stock is $7.00 – $22.00. Based on these forecasts, analysts predict The Gap Inc. (GPS) will achieve an average price target of $14.59.


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