Looking To Buy The Gap Inc. (GPS)? Read This First

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The Gap Inc. (NYSE:GPS) saw an upside of 1.89% to close Monday at $13.48 after adding $0.25 on the day. The 5-day average trading volume is 6,796,840 shares of the company’s common stock. It has gained $13.66 in the past week and touched a new high 3 times within the past 5 days. An average of 6,943,385 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 8,503,220.

GPS’s 1-month performance is 10.76% or $1.42 on its low of $10.82 reached on 01/03/23. The company’s shares have touched a 52-week low of $7.79 and high of $18.46, with the stock’s rally to the 52-week high happening on 01/23/23. YTD, GPS has achieved 19.50% or $2.20 and has reached a new high 9 times. However, the current price is down -26.98% from the 52-week high price.

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Insider Transactions

GPS stock investors last saw insider trading activity on Dec 21.Breitbard Mark (President & CEO, Gap Brand) most recently sold 7,311 shares at $12.34 per share on Dec 21. This transaction cost the insider $90,208. EVP CFO, O’Connell Katrina, sold 31,294 shares at a price of $14.00 on Nov 18. Then, on Oct 31, President & CEO, Athleta Laughton Mary Beth sold 11,030 shares at a price of $11.28 per share. This transaction amounted to $124,402.

Valuation Metrics

GPS stock has a beta of 1.90. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 0.30 while the price-to-book (PB) in the most recent quarter is 1.91.

The Gap Inc.’s quick ratio for the period ended July 30 was 0.60, with the current ratio over the same period at 1.50. As well, the company’s long term debt to equity for the quarter ending July 30 was 0.71, while the total debt to equity was 0.71. In terms of profitability, the gross margin trailing 12 months is 34.30%. The firm’s gross profit as reported stood at $6.64 billion against revenue of $16.67 billion.

Earnings Surprise

For the quarterly period ending July 30 this year, Net income and sales went up compared to those figures reported in the previous quarter. Net income grew 153.9% to $282.0 million, while revenue of -$49.0 million was 117.38% off the previous quarter. Analysts expected GPS to announce -$0.05 per share in earnings in its latest quarter, but it posted $0.08, representing a 260.00% surprise. EBITDA for the quarter stood at more than $327.0 million. GPS stock balance sheet for the quarter ending July 30 shows that total liabilities totaled 9.43 billion, with total debt at $6.41 billion. Shareholders hold equity totaling $365.05 million.

Let’s look briefly at The Gap Inc. (GPS) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 23 January was 69.98% to suggest the stock is trending Neutral, with historical volatility in this time period at 23.32%.

The stock’s 5-day moving average is $13.05, reflecting a +4.42% or $0.57 change from its current price. GPS is currently trading +12.90% above its 20-day SMA, +42.19% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 by +17.63% and SMA200 by-1.61%.

Stochastic %K and %D was 87.51% and 85.12% and the average true range (ATR) pointed at 0.52. The RSI (14) points at 62.52%, while the 14-day stochastic is at 93.67% with the period’s ATR at 0.53. The stock’s 9-day MACD Oscillator is pointing at 0.30 and 0.72 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for The Gap Inc. (NYSE: GPS), Morgan Stanley upgraded it to an Equal-weight rating. They previously had an Underweight rating on the stock. Analysts offering their rating for GPS stock have a consensus rating for the stock as Hold. Currently, 4 brokerage advisors rate GPS as a “sell,”, while 13 advise that investors “Hold.” 2 analysts have rated the stock as underweight. 1 rates the stock as overweight while 2 have offered a “buy” rating.

What is GPS’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $7.00 and a high of $18.00, with their median price target at $12.00. Looking at these predictions, the average price target given by analysts is for The Gap Inc. (GPS) stock is $11.93.

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