GAP INC/THE (GAP) Fundamental Analysis & Valuation

NYSE:GAP • US3647601083

Current stock price

24.74 USD
-0.33 (-1.32%)
At close:
24.74 USD
0 (0%)
Pre-Market:

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

6

1. GAP Profitability Analysis

1.1 Basic Checks

  • GAP had positive earnings in the past year.
  • In the past year GAP had a positive cash flow from operations.
  • Of the past 5 years GAP 4 years were profitable.
  • In the past 5 years GAP always reported a positive cash flow from operatings.
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

  • GAP has a Return On Assets of 6.46%. This is in the better half of the industry: GAP outperforms 77.24% of its industry peers.
  • GAP has a better Return On Equity (21.47%) than 82.11% of its industry peers.
  • Looking at the Return On Invested Capital, with a value of 8.74%, GAP is in the better half of the industry, outperforming 77.24% of the companies in the same industry.
Industry RankSector Rank
ROA 6.46%
ROE 21.47%
ROIC 8.74%
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
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

  • GAP has a Profit Margin of 5.31%. This is amongst the best in the industry. GAP outperforms 80.49% of its industry peers.
  • Looking at the Operating Margin, with a value of 7.26%, GAP is in the better half of the industry, outperforming 76.42% of the companies in the same industry.
  • GAP has a better Gross Margin (40.79%) than 62.60% of its industry peers.
  • GAP's Gross Margin has improved in the last couple of years.
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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5

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.
  • GAP has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
GAP Yearly Shares OutstandingGAP Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 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 2B 4B 6B 8B 10B

2.2 Solvency

  • 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.
  • The Debt to FCF ratio of GAP (1.81) is better than 77.24% of its industry peers.
  • A Debt/Equity ratio of 0.39 indicates that GAP is not too dependend on debt financing.
  • GAP's Debt to Equity ratio of 0.39 is in line compared to the rest of the industry. GAP outperforms 57.72% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.39
Debt/FCF 1.81
Altman-Z N/A
ROIC/WACC1.01
WACC8.67%
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.
  • Looking at the Current ratio, with a value of 1.75, GAP is in the better half of the industry, outperforming 73.17% of the companies in the same industry.
  • A Quick Ratio of 1.08 indicates that GAP should not have too much problems paying its short term obligations.
  • The Quick ratio of GAP (1.08) is better than 75.61% of its industry peers.
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 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%.
  • GAP shows a small growth in Revenue. In the last year, the Revenue has grown by 1.86%.
  • Measured over the past years, GAP shows a small growth in Revenue. The Revenue has been growing by 2.17% on average per year.
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

  • The Earnings Per Share is expected to grow by 7.53% on average over the next years.
  • The Revenue is expected to grow by 2.13% on average over the next years.
EPS Next Y8.91%
EPS Next 2Y10.91%
EPS Next 3Y10.09%
EPS Next 5Y7.53%
Revenue Next Year2.47%
Revenue Next 2Y2.74%
Revenue Next 3Y2.75%
Revenue Next 5Y2.13%

3.3 Evolution

  • The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
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

  • A Price/Earnings ratio of 11.51 indicates a reasonable valuation of GAP.
  • Based on the Price/Earnings ratio, GAP is valued cheaply inside the industry as 81.30% of the companies are valued more expensively.
  • The average S&P500 Price/Earnings ratio is at 24.89. GAP is valued rather cheaply when compared to this.
  • With a Price/Forward Earnings ratio of 10.57, the valuation of GAP can be described as very reasonable.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of GAP indicates a rather cheap valuation: GAP is cheaper than 80.49% of the companies listed in the same industry.
  • GAP is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.19, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 11.51
Fwd PE 10.57
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 88.62% of the companies are valued more expensively.
  • 77.24% 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 11.18
EV/EBITDA 4.53
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.
  • GAP has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.29
PEG (5Y)N/A
EPS Next 2Y10.91%
EPS Next 3Y10.09%

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

5

5. GAP Dividend Analysis

5.1 Amount

  • GAP has a Yearly Dividend Yield of 2.79%. Purely for dividend investing, there may be better candidates out there.
  • Compared to an average industry Dividend Yield of 2.75, GAP pays a better dividend. On top of this GAP pays more dividend than 82.11% of the companies listed in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.89, GAP pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 2.79%

5.2 History

  • The dividend of GAP decreases each year by -9.10%.
  • GAP has paid a dividend for at least 10 years, which is a reliable track record.
  • GAP has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-9.1%
Div Incr Years0
Div Non Decr Years4
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 2Y10.91%
EPS Next 3Y10.09%
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 (3/27/2026, 8:21:29 PM)

Premarket: 24.74 0 (0%)

24.74

-0.33 (-1.32%)

Chartmill FA Rating
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)03-05
Earnings (Next)05-27
Inst Owners61.41%
Inst Owner Change-2.57%
Ins Owners39.32%
Ins Owner Change1.47%
Market Cap9.20B
Revenue(TTM)15.37B
Net Income(TTM)816.00M
Analysts77.5
Price Target31.25 (26.31%)
Short Float %10.91%
Short Ratio3.06
Dividend
Industry RankSector Rank
Dividend Yield 2.79%
Yearly Dividend0.6
Dividend Growth(5Y)-9.1%
DP30.27%
Div Incr Years0
Div Non Decr Years4
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)-21.49%
EPS NQ rev (3m)-21.32%
EPS NY rev (1m)-0.08%
EPS NY rev (3m)0.73%
Revenue NQ rev (1m)-0.17%
Revenue NQ rev (3m)-0.08%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)0.21%
Valuation
Industry RankSector Rank
PE 11.51
Fwd PE 10.57
P/S 0.6
P/FCF 11.18
P/OCF 7.12
P/B 2.42
P/tB 2.42
EV/EBITDA 4.53
EPS(TTM)2.15
EY8.69%
EPS(NY)2.34
Fwd EY9.46%
FCF(TTM)2.21
FCFY8.94%
OCF(TTM)3.48
OCFY14.05%
SpS41.32
BVpS10.22
TBVpS10.22
PEG (NY)1.29
PEG (5Y)N/A
Graham Number22.23
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)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
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 250
Cash Conversion 80.26%
Profit Quality 100.86%
Current Ratio 1.75
Quick Ratio 1.08
Altman-Z N/A
F-Score6
WACC8.67%
ROIC/WACC1.01
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 Y8.91%
EPS Next 2Y10.91%
EPS Next 3Y10.09%
EPS Next 5Y7.53%
Revenue 1Y (TTM)1.86%
Revenue growth 3Y-0.54%
Revenue growth 5Y2.17%
Sales Q2Q%2.1%
Revenue Next Year2.47%
Revenue Next 2Y2.74%
Revenue Next 3Y2.75%
Revenue Next 5Y2.13%
EBIT growth 1Y-0.45%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year51.94%
EBIT Next 3Y17.53%
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 5 / 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.


What is the profitability of GAP stock?

GAP INC/THE (GAP) has a profitability rating of 6 / 10.


What is the expected EPS growth for GAP INC/THE (GAP) stock?

The Earnings per Share (EPS) of GAP INC/THE (GAP) is expected to grow by 8.91% in the next year.


Is the dividend of GAP INC/THE sustainable?

The dividend rating of GAP INC/THE (GAP) is 5 / 10 and the dividend payout ratio is 30.27%.