GAP INC/THE (GAP) Fundamental Analysis & Valuation

NYSE:GAP • US3647601083

Current stock price

26.08 USD
+0.28 (+1.09%)
At close:
26.24 USD
+0.16 (+0.61%)
After Hours:

This GAP fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

7

1. GAP Profitability Analysis

1.1 Basic Checks

  • GAP had positive earnings in the past year.
  • GAP had a positive operating cash flow in the past year.
  • GAP had positive earnings in 4 of the past 5 years.
  • GAP had a positive operating cash flow in each of the past 5 years.
GAP Yearly Net Income VS EBIT VS OCF VS FCFGAP Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0 500M -500M 1B 1.5B

1.2 Ratios

  • Looking at the Return On Assets, with a value of 6.46%, GAP is in the better half of the industry, outperforming 77.05% of the companies in the same industry.
  • GAP's Return On Equity of 21.47% is amongst the best of the industry. GAP outperforms 81.97% of its industry peers.
  • With a decent Return On Invested Capital value of 8.74%, GAP is doing good in the industry, outperforming 75.41% of the companies in the same industry.
  • Measured over the past 3 years, the Average Return On Invested Capital for GAP is significantly below the industry average of 13.64%.
  • The 3 year average ROIC (7.94%) for GAP is below the current ROIC(8.74%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 6.46%
ROE 21.47%
ROIC 8.74%
ROA(3y)6.04%
ROA(5y)3.67%
ROE(3y)22.22%
ROE(5y)13.41%
ROIC(3y)7.94%
ROIC(5y)N/A
GAP Yearly ROA, ROE, ROICGAP Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0 20 -20

1.3 Margins

  • The Profit Margin of GAP (5.31%) is better than 81.97% of its industry peers.
  • GAP has a Operating Margin of 7.26%. This is in the better half of the industry: GAP outperforms 75.41% of its industry peers.
  • Looking at the Gross Margin, with a value of 40.79%, GAP is in the better half of the industry, outperforming 63.11% of the companies in the same industry.
  • In the last couple of years the Gross Margin of GAP has grown nicely.
Industry RankSector Rank
OM 7.26%
PM (TTM) 5.31%
GM 40.79%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y5.93%
GM growth 5Y3.65%
GAP Yearly Profit, Operating, Gross MarginsGAP Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0 10 20 30 40

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7

2. GAP Health Analysis

2.1 Basic Checks

  • With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), GAP is creating some value.
  • The number of shares outstanding for GAP has been reduced compared to 1 year ago.
  • The number of shares outstanding for GAP has been reduced compared to 5 years ago.
  • GAP has a better debt/assets ratio than last year.
GAP Yearly Shares OutstandingGAP Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 100M 200M 300M
GAP Yearly Total Debt VS Total AssetsGAP Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2B 4B 6B 8B 10B

2.2 Solvency

  • GAP has an Altman-Z score of 2.79. This is not the best score and indicates that GAP is in the grey zone with still only limited risk for bankruptcy at the moment.
  • With a decent Altman-Z score value of 2.79, GAP is doing good in the industry, outperforming 62.30% of the companies in the same industry.
  • The Debt to FCF ratio of GAP is 1.81, which is an excellent value as it means it would take GAP, only 1.81 years of fcf income to pay off all of its debts.
  • GAP has a Debt to FCF ratio of 1.81. This is in the better half of the industry: GAP outperforms 76.23% of its industry peers.
  • A Debt/Equity ratio of 0.39 indicates that GAP is not too dependend on debt financing.
  • The Debt to Equity ratio of GAP (0.39) is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.39
Debt/FCF 1.81
Altman-Z 2.79
ROIC/WACC1.07
WACC8.14%
GAP Yearly LT Debt VS Equity VS FCFGAP Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0 1B 2B 3B

2.3 Liquidity

  • GAP has a Current Ratio of 1.75. This is a normal value and indicates that GAP is financially healthy and should not expect problems in meeting its short term obligations.
  • GAP's Current ratio of 1.75 is fine compared to the rest of the industry. GAP outperforms 72.13% of its industry peers.
  • GAP has a Quick Ratio of 1.08. This is a normal value and indicates that GAP is financially healthy and should not expect problems in meeting its short term obligations.
  • With a decent Quick ratio value of 1.08, GAP is doing good in the industry, outperforming 73.77% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.75
Quick Ratio 1.08
GAP Yearly Current Assets VS Current LiabilitesGAP Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2B 4B 6B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

3

3. GAP Growth Analysis

3.1 Past

  • GAP shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.71%.
  • Looking at the last year, GAP shows a small growth in Revenue. The Revenue has grown by 1.86% in the last year.
  • The Revenue has been growing slightly by 2.17% on average over the past years.
EPS 1Y (TTM)-2.71%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-16.67%
Revenue 1Y (TTM)1.86%
Revenue growth 3Y-0.54%
Revenue growth 5Y2.17%
Sales Q2Q%2.1%

3.2 Future

  • Based on estimates for the next years, GAP will show a small growth in Earnings Per Share. The EPS will grow by 7.53% on average per year.
  • The Revenue is expected to grow by 2.13% on average over the next years.
EPS Next Y9.6%
EPS Next 2Y10.76%
EPS Next 3Y10.96%
EPS Next 5Y7.53%
Revenue Next Year2.48%
Revenue Next 2Y2.74%
Revenue Next 3Y2.64%
Revenue Next 5Y2.13%

3.3 Evolution

  • When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
GAP Yearly Revenue VS EstimatesGAP Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 5B 10B 15B
GAP Yearly EPS VS EstimatesGAP Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 0 1 -1 2 -2 3

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7

4. GAP Valuation Analysis

4.1 Price/Earnings Ratio

  • GAP is valuated correctly with a Price/Earnings ratio of 12.13.
  • GAP's Price/Earnings ratio is rather cheap when compared to the industry. GAP is cheaper than 81.97% of the companies in the same industry.
  • When comparing the Price/Earnings ratio of GAP to the average of the S&P500 Index (27.53), we can say GAP is valued rather cheaply.
  • The Price/Forward Earnings ratio is 11.07, which indicates a very decent valuation of GAP.
  • Based on the Price/Forward Earnings ratio, GAP is valued cheaper than 83.61% of the companies in the same industry.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 37.95, GAP is valued rather cheaply.
Industry RankSector Rank
PE 12.13
Fwd PE 11.07
GAP Price Earnings VS Forward Price EarningsGAP Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

  • Based on the Enterprise Value to EBITDA ratio, GAP is valued cheaply inside the industry as 89.34% of the companies are valued more expensively.
  • 76.23% of the companies in the same industry are more expensive than GAP, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 11.58
EV/EBITDA 4.74
GAP Per share dataGAP EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40

4.3 Compensation for Growth

  • The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
  • The decent profitability rating of GAP may justify a higher PE ratio.
PEG (NY)1.26
PEG (5Y)N/A
EPS Next 2Y10.76%
EPS Next 3Y10.96%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

6

5. GAP Dividend Analysis

5.1 Amount

  • GAP has a Yearly Dividend Yield of 2.66%. Purely for dividend investing, there may be better candidates out there.
  • GAP's Dividend Yield is rather good when compared to the industry average which is at 3.39. GAP pays more dividend than 81.15% of the companies in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.82, GAP pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 2.66%

5.2 History

  • GAP has paid a dividend for at least 10 years, which is a reliable track record.
  • GAP has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years5
GAP Yearly Dividends per shareGAP Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0.2 0.4 0.6 0.8 1

5.3 Sustainability

  • GAP pays out 30.27% of its income as dividend. This is a sustainable payout ratio.
DP30.27%
EPS Next 2Y10.76%
EPS Next 3Y10.96%
GAP Yearly Income VS Free CF VS DividendGAP Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0 500M -500M 1B
GAP Dividend Payout.GAP Dividend Payout, showing the Payout Ratio.GAP Dividend Payout.PayoutRetained Earnings

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GAP Fundamentals: All Metrics, Ratios and Statistics

GAP INC/THE

NYSE:GAP (4/16/2026, 8:04:00 PM)

After market: 26.24 +0.16 (+0.61%)

26.08

+0.28 (+1.09%)

Chartmill FA Rating
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)03-05
Earnings (Next)05-27
Inst Owners63.36%
Inst Owner Change-0.09%
Ins Owners39.33%
Ins Owner Change1.04%
Market Cap9.53B
Revenue(TTM)15.37B
Net Income(TTM)816.00M
Analysts79.17
Price Target31.25 (19.82%)
Short Float %14.41%
Short Ratio3.91
Dividend
Industry RankSector Rank
Dividend Yield 2.66%
Yearly Dividend0.66
Dividend Growth(5Y)N/A
DP30.27%
Div Incr Years1
Div Non Decr Years5
Ex-Date04-08
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.83%
Min EPS beat(2)-2.41%
Max EPS beat(2)4.07%
EPS beat(4)3
Avg EPS beat(4)3.95%
Min EPS beat(4)-2.41%
Max EPS beat(4)11.43%
EPS beat(8)7
Avg EPS beat(8)38.08%
EPS beat(12)11
Avg EPS beat(12)82.1%
EPS beat(16)13
Avg EPS beat(16)7649.39%
Revenue beat(2)0
Avg Revenue beat(2)-0.7%
Min Revenue beat(2)-1.19%
Max Revenue beat(2)-0.2%
Revenue beat(4)1
Avg Revenue beat(4)-0.61%
Min Revenue beat(4)-1.3%
Max Revenue beat(4)0.23%
Revenue beat(8)4
Avg Revenue beat(8)0.17%
Revenue beat(12)6
Avg Revenue beat(12)0.24%
Revenue beat(16)7
Avg Revenue beat(16)0.25%
PT rev (1m)0.09%
PT rev (3m)7.08%
EPS NQ rev (1m)-1.56%
EPS NQ rev (3m)-21.32%
EPS NY rev (1m)0.63%
EPS NY rev (3m)1.36%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-0.08%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.21%
Valuation
Industry RankSector Rank
PE 12.13
Fwd PE 11.07
P/S 0.62
P/FCF 11.58
P/OCF 7.37
P/B 2.51
P/tB 2.51
EV/EBITDA 4.74
EPS(TTM)2.15
EY8.24%
EPS(NY)2.36
Fwd EY9.04%
FCF(TTM)2.25
FCFY8.64%
OCF(TTM)3.54
OCFY13.57%
SpS42.06
BVpS10.4
TBVpS10.4
PEG (NY)1.26
PEG (5Y)N/A
Graham Number22.4342 (-13.98%)
Profitability
Industry RankSector Rank
ROA 6.46%
ROE 21.47%
ROCE 11.95%
ROIC 8.74%
ROICexc 12.89%
ROICexgc 12.89%
OM 7.26%
PM (TTM) 5.31%
GM 40.79%
FCFM 5.36%
ROA(3y)6.04%
ROA(5y)3.67%
ROE(3y)22.22%
ROE(5y)13.41%
ROIC(3y)7.94%
ROIC(5y)N/A
ROICexc(3y)10.67%
ROICexc(5y)N/A
ROICexgc(3y)11.13%
ROICexgc(5y)N/A
ROCE(3y)10.85%
ROCE(5y)N/A
ROICexgc growth 3YN/A
ROICexgc growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y5.93%
GM growth 5Y3.65%
F-Score6
Asset Turnover1.22
Health
Industry RankSector Rank
Debt/Equity 0.39
Debt/FCF 1.81
Debt/EBITDA 0.93
Cap/Depr 94.76%
Cap/Sales 3.06%
Interest Coverage 17.7
Cash Conversion 80.26%
Profit Quality 100.86%
Current Ratio 1.75
Quick Ratio 1.08
Altman-Z 2.79
F-Score6
WACC8.14%
ROIC/WACC1.07
Cap/Depr(3y)88.21%
Cap/Depr(5y)105.83%
Cap/Sales(3y)2.95%
Cap/Sales(5y)3.48%
Profit Quality(3y)148.49%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-2.71%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-16.67%
EPS Next Y9.6%
EPS Next 2Y10.76%
EPS Next 3Y10.96%
EPS Next 5Y7.53%
Revenue 1Y (TTM)1.86%
Revenue growth 3Y-0.54%
Revenue growth 5Y2.17%
Sales Q2Q%2.1%
Revenue Next Year2.48%
Revenue Next 2Y2.74%
Revenue Next 3Y2.64%
Revenue Next 5Y2.13%
EBIT growth 1Y-0.45%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year50.79%
EBIT Next 3Y18.42%
EBIT Next 5Y9.67%
FCF growth 1Y-20.79%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-12.99%
OCF growth 3Y28.67%
OCF growth 5Y40.4%

GAP INC/THE / GAP Fundamental Analysis FAQ

What is the ChartMill fundamental rating of GAP INC/THE (GAP) stock?

ChartMill assigns a fundamental rating of 6 / 10 to GAP.


Can you provide the valuation status for GAP INC/THE?

ChartMill assigns a valuation rating of 7 / 10 to GAP INC/THE (GAP). This can be considered as Undervalued.


How profitable is GAP INC/THE (GAP) stock?

GAP INC/THE (GAP) has a profitability rating of 7 / 10.


What is the valuation of GAP INC/THE based on its PE and PB ratios?

The Price/Earnings (PE) ratio for GAP INC/THE (GAP) is 12.13 and the Price/Book (PB) ratio is 2.51.


Can you provide the financial health for GAP stock?

The financial health rating of GAP INC/THE (GAP) is 7 / 10.