The Gap, Inc. (GPS): What’s the Story?

The Gap, Inc. (GPS) is an interesting player in the Services space, with a focus on Apparel Stores. The stock has been active on the tape, currently trading at $30.16, up from yesterday’s close by 0.37%. Given the stock’s recent action, it seemed like a good time to take a closer look at the company’s recent data.

Fundamental Analysis

The Gap, Inc. (GPS) currently trades with a market capitalization of $11.97 Billion. That value represents a market adjusting for revenues that have been growing by 7.88 % on a quarterly year/year basis as of the company’s last quarterly report.

You can get a sense of how sustainable that is by a levered free cash flow of $649 Million over the past twelve months. Generally speaking, earnings are expected to grow in coming quarters. Analysts are forecasting earnings of $0.46 on a per share basis this quarter. Perhaps, that suggests something about why 9.07% of the outstanding share supply is held by institutional investors.

Technical Analysis

We’ve taken a serious look at this stock from a fundamental perspective, but the tale of the tape may offer more hints about what lies under the surface. Looking at the stock’s movement on the chart, The Gap, Inc. recorded a 52-week high of $35.68. It is now trading 5.52% off that level. The stock is trading $31.88 its 50-day moving average by 1.72%. The stock carved out a 52-week low down at $21.02.

In recent action, The Gap, Inc. (GPS) has made a move of -4.98% over the past month, which has come on weak relative transaction volume. Over the trailing year, the stock is underperforming the S&P 500 by 13.41, and it’s gotten there by action that has been less volatile on a day-to-day basis than most other stocks on the exchange. In terms of the mechanics underlying that movement, traders will want to note that the stock is trading on a float of 11.70% with $243.70 Million sitting short, betting on future declines. That suggests something of the likelihood of a short squeeze in shares of GPS.

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