Retail Stock Fighting to Reclaim Double Digits

Gap stock might be up big this quarter, but it sports a big year-to-date deficit

facebook twitter linkedin


When we last checked in with Gap Inc ( NYSE:GPS), the retail stock was languishing under $10. A little over two months later, is there anything salvable from GPS that prudent investors can latch on to?

Despite a 19.4% quarterly gain, Gap stock is still down 57% year-over-year and 44.4% in 2022. The shares remain under $10, and have not closed above this psychologically-significant double-digit level since Aug. 25. Still, Gap offers an intriguing valuation at a forward price-earnings ratio of 11.88 and a price-sales ratio of 0.23. Moreover, it provides an extremely attractive dividend yield of 6.17% at a forward dividend of $0.60.

However, the company maintains some relatively poor fundamentals. It holds just $708 million in cash and $6.41 billion in total debt on its balance sheet, making its owed amount nearly twice its market cap of $3.47 billion. In addition, The Gap is estimated to report a 6.4% decrease in revenue and a $1.7 decrease in earnings per share for fiscal 2023. Its eps is estimated to drop from $1.44 to -$0.26, signaling an expected shift to unprofitability.

Fortunately, the business’s fiscal 2024 estimates are positive with its revenue expected to grow by 2.3% and its earnings per share expected to increase by $0.98, from -$0.26 to $0.72, potentially making GPS an option as a recovery play.

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners