Is Gap Stock Overvalued or Undervalued?

A sign hangs above the entrance of a Gap store in Chicago, Ill., Oct. 13. Gap Inc. plans to reduce the number of Gap brand stores to 700 in North America, closing roughly one-third of its existing stores by the end of 2013. Scott Olson/Getty Images

Gap Inc shares have lagged the S&P 500 in 2021, generating a year-to-date total return loss of 9.2 percent.

Gap stock has had a wild ride in recent years, but investors may be wondering whether there’s any value in Gap shares after the recent pullback.

Earnings

A price-to-earnings ratio (PE) is one of the most basic fundamental metrics for gauging a stock’s value. The lower the PE, the higher the value.