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 Stochastic Oscillator is staying in overbought zone for 1 day
Expect a price pull-back in the near future.
Technical Analysis (Indicators)
Bearish Trend Analysis
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 of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for GPS entered a downward trend on June 01, 2023. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where GPS's RSI Oscillator exited the oversold zone, of 25 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on May 26, 2023. You may want to consider a long position or call options on GPS as a result. In of 93 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for GPS just turned positive on May 26, 2023. Looking at past instances where GPS's MACD turned positive, the stock continued to rise in of 55 cases over the following month. The odds of a continued upward trend are .
Following a +1 3-day Advance, the price is estimated to grow further. Considering data from situations where GPS advanced for three days, in of 290 cases, the price rose further within the following month. The odds of a continued upward trend are .
GPS may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of (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 (1.361) is normal, around the industry mean (3.366). P/E Ratio (77.200) is within average values for comparable stocks, (107.547). Projected Growth (PEG Ratio) (1.003) is also within normal values, averaging (4.382). Dividend Yield (0.074) settles around the average of (0.041) among similar stocks. P/S Ratio (0.192) is also within normal values, averaging (1.527).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding 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 Seasonality Score of (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 Price Growth Rating for this company is (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 SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable 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 Profit vs. Risk Rating rating for this company is (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 82, placing this stock worse than average.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
an operator of stores that retail clothing, accessories and personal care products
Industry ApparelFootwearRetail
GPS and
Correlation & Price change
A.I.dvisor indicates that over the last year, GPS has been closely correlated with URBN. These tickers have moved in lockstep 69% of the time. This A.I.-generated data suggests there is a high statistical probability that if GPS jumps, then URBN could also see price increases.
| Ticker / NAME | Correlation To GPS | 1D Price Change % | ||
|---|---|---|---|---|
| GPS | 100% | +0.75% | ||
| URBN - GPS | 69% Closely correlated | -1.07% | ||
| CRI - GPS | 66% Loosely correlated | -1.11% | ||
| AEO - GPS | 65% Loosely correlated | +1.18% | ||
| VSCO - GPS | 65% Loosely correlated | -8.72% | ||
| GES - GPS | 63% Loosely correlated | -1.72% | ||
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