GAP (GPS, $18.11) disappoints on Q3 earnings
Gap posted third quarter earnings that missed analysts’ expectations.
The clothing retail company’s earnings came in at 27 cents compared to 50 cents expected by analysts polled by Refinitiv.
Revenue of $3.94 billion also fell short of $4.44 billion expected.
Gap’s inventories were down -1% at the end of the third quarter from a year ago. They were flat versus 2019. The company expects fourth-quarter inventories to be up high-single digits year over year.
Looking ahead, Gap expects full-year revenue to increase about 20%, vs. its prior forecast of about a 30% increase. Analysts polled by Refinitiv were expecting a 28.4% year-over-year gain.
Gap now projects adjusted full-year earnings to a range of $1.25 to $1.40 per share, lower than prior range of $2.10 to $2.25 a share. Analysts had expected $2.20 per share (based on Refinitiv data). The company said that the downward revision in outlook incorporates the $550 million to $650 million of lost sales from supply chain constraints and about $450 million in air freight costs.
GPS's RSI Oscillator recovers from oversold territory
The RSI Indicator for GPS moved out of oversold territory on May 25, 2022. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 23 similar instances when the indicator left oversold territory. In 23 of the 23 cases the stock moved higher. This puts the odds of a move higher at 90%.
Current price $11.13 is below $11.89 the lowest support line found by A.I. Throughout the month of 04/26/22 - 05/26/22, the price experienced a -11% Downtrend. During the week of 05/19/22 - 05/26/22, the stock fell -0.63%.
The Stochastic Indicator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 51 of 68 cases where GPS's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 75%.
Following a +17.42% 3-day Advance, the price is estimated to grow further. Considering data from situations where GPS advanced for three days, in 213 of 289 cases, the price rose further within the following month. The odds of a continued upward trend are 74%.
GPS may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Momentum Indicator moved below the 0 level on May 10, 2022. You may want to consider selling the stock, shorting the stock, or exploring put options on GPS as a result. In 74 of 94 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 79%.
The Moving Average Convergence Divergence Histogram (MACD) for GPS turned negative on May 18, 2022. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 58 similar instances when the indicator turned negative. In 48 of the 58 cases the stock turned lower in the days that followed. This puts the odds of success at 83%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where GPS declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 72%.
The Aroon Indicator for GPS entered a downward trend on May 26, 2022. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Tickeron has a negative outlook on this ticker and predicts a further decline by more than 4.00% within the next month with a likelihood of 71%. During the last month, the daily ratio of advancing to declining volumes was 1.12 to 1.
The Tickeron Valuation Rating of 7 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.511) is normal, around the industry mean (6.367). P/E Ratio (16.584) is within average values for comparable stocks, (26.005). GPS's Projected Growth (PEG Ratio) (0.413) is slightly lower than the industry average of (1.219). Dividend Yield (0.046) settles around the average of (0.032) among similar stocks. P/S Ratio (0.255) is also within normal values, averaging (1.825).
The Tickeron SMR rating for this company is 7 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is 72 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 81 (best 1 - 100 worst), indicating slightly worse than average price growth. GPS’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. GPS’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 79, placing this stock worse than average.
Companies in the apparel and/or footwear retail industry sell clothing, accessories and footwear, for different age groups and genders. The industry’s product categories could range from basics, such as underwear, to luxury items. Some retailers source items from wholesalers or an apparel brand to sell in their stores; some others are licensed to make and market their own retail goods under particular brands. Several companies outsource production of clothing to developing/emerging economies where labor costs are relatively inexpensive. Apparel retail is often influenced by fashion trends, and many companies feel the need to adapt to what’s “in vogue” to retain customers and attract new ones. A major disruption in this industry has been the burgeoning trend in digital shopping – to compete with rapidly growing e-commerce, even traditional retail players are upping the ante on their online platforms. Much of the products’ performance in apparel/footwear retail is cyclical, i.e., economic boom times encourage consumer spending, while recessions induce thriftiness among people. Some large-cap U.S. apparel/footwear retail companies include TJX Companies Inc., Ross Stores, Inc., Lululemon Athletica Inc. and Burlington Stores, Inc.
The average market capitalization across the Apparel/Footwear Retail Industry is 7.5B. The market cap for tickers in the group ranges from 256K to 71.9B. TJX holds the highest valuation in this group at 71.9B. The lowest valued company is DESTQ at 256K.
The average weekly price growth across all stocks in the Apparel/Footwear Retail Industry was -1.37%. For the same Industry, the average monthly price growth was -7.58%, and the average quarterly price growth was -14.88%. LVLU experienced the highest price growth at 37.32%, while EXPR experienced the biggest fall at -29.44%.
- 5/18/22 5:18 AM: Gap (The) (GPS, $12.81) was a top weekly gainer, with a +7.29% jump
- 4/30/22 6:01 AM: Gap (The) (GPS, $12.42) was a top weekly gainer, with a +5.97% jump
- 4/14/22 4:49 AM: Gap (The) (GPS, $14.46) was a top weekly gainer, with a +9.05% jump
The average weekly volume growth across all stocks in the Apparel/Footwear Retail Industry was -4.56%. For the same stocks of the Industry, the average monthly volume growth was 74.83% and the average quarterly volume growth was 129%
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Stocks in the group have a Negative Outlook today, backed by the Aroon Indicator. Tickeron has a negative outlook on this group and predicts a further decline by more than 4.00% within the next month with a likelihood of 38%. During the last month, the daily ratio of advancing to declining volumes was 1 to 1.13.
27 stocks in the group of tickers confirmed the negative outlook based on the TrendMonth indicator with average odds of 78%.
The most notable companies in this group are TJX Companies (NYSE:TJX), lululemon athletica (NASDAQ:LULU), Gap (The) (NYSE:GPS), Foot Locker (NYSE:FL), G-III Apparel Group Ltd (NASDAQ:GIII), Abercrombie & Fitch Co (NYSE:ANF), Guess (NYSE:GES), Stitch Fix (NASDAQ:SFIX).
The average market capitalization across the group is 4.5B. The market cap for tickers in the group ranges from 6.4M to 75.3B. TJX holds the highest valuation in this group at 75.3B. The lowest valued company is IVDN at 6.4M.
The average weekly price growth across all stocks in the group was 0.66%. For the same group, the average monthly price growth was -7.04%, and the average quarterly price growth was -23.89%. CTRN experienced the highest price growth at 14.57%, while EXPR experienced the biggest fall at -25%.
- 5/25/22 7:32 AM: Designer Brands (DBI, $13.03) was a top loser this week, declining -9.51%. Expect a Downtrend reversal
- 5/24/22 7:00 AM: Express (EXPR, $2.95) is a top weekly loser for penny stocks, falling -20.49%
- 5/21/22 6:30 AM: Esprit Holdings (ESPGY, $0.29) was a top loser this week, declining -12%
The average weekly volume growth across all stocks in the group was 491.79%. For the same stocks of the group, the average monthly volume growth was 718.15% and the average quarterly volume growth was 371.97%
- 5/25/22 7:27 AM: The volume for Digital Brands Group stock increased for a consecutive 5 days, with an average daily gain of 361%
- 5/25/22 7:26 AM: The volume for Express stock increased for two consecutive days, resulting in a record-breaking daily growth of 214% of the 65-Day Volume Moving Average
- 5/24/22 6:55 AM: The volume for Digital Brands Group stock increased for a consecutive 5 days, with an average daily gain of 388%
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows