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GAP vs. CPRI: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Gap (GAP - Free Report) and Capri Holdings (CPRI - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Gap and Capri Holdings are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GAP is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
GAP currently has a forward P/E ratio of 8.50, while CPRI has a forward P/E of 21.84. We also note that GAP has a PEG ratio of 1.36. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CPRI currently has a PEG ratio of 7.64.
Another notable valuation metric for GAP is its P/B ratio of 2.33. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, CPRI has a P/B of 2.37.
Based on these metrics and many more, GAP holds a Value grade of A, while CPRI has a Value grade of C.
GAP is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that GAP is likely the superior value option right now.
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GAP vs. CPRI: Which Stock Is the Better Value Option?
Investors interested in stocks from the Retail - Apparel and Shoes sector have probably already heard of Gap (GAP - Free Report) and Capri Holdings (CPRI - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Gap and Capri Holdings are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GAP is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
GAP currently has a forward P/E ratio of 8.50, while CPRI has a forward P/E of 21.84. We also note that GAP has a PEG ratio of 1.36. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CPRI currently has a PEG ratio of 7.64.
Another notable valuation metric for GAP is its P/B ratio of 2.33. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, CPRI has a P/B of 2.37.
Based on these metrics and many more, GAP holds a Value grade of A, while CPRI has a Value grade of C.
GAP is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that GAP is likely the superior value option right now.