GAP INC/THE (GAP) Stock Fundamental Analysis
NYSE:GAP - New York Stock Exchange, Inc. - US3647601083 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to GAP. GAP was compared to 121 industry peers in the Specialty Retail industry. GAP scores excellent on profitability, but there are some minor concerns on its financial health. GAP has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
GAP had positive earnings in the past year.
In the past year GAP had a positive cash flow from operations.
In multiple years GAP reported negative net income over the last 5 years.
In the past 5 years GAP always reported a positive cash flow from operatings.
1.2 Ratios
GAP has a Return On Assets of 7.10%. This is in the better half of the industry: GAP outperforms 77.69% of its industry peers.
The Return On Equity of GAP (25.86%) is better than 82.64% of its industry peers.
GAP has a better Return On Invested Capital (10.68%) than 74.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.1% | ||
| ROE | 25.86% | ||
| ROIC | 10.68% |
ROA(3y)3.29%
ROA(5y)1.41%
ROE(3y)12.05%
ROE(5y)4.02%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
GAP has a Profit Margin of 5.59%. This is in the better half of the industry: GAP outperforms 78.51% of its industry peers.
GAP's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 7.42%, GAP is in the better half of the industry, outperforming 76.03% of the companies in the same industry.
GAP's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 41.28%, GAP is doing good in the industry, outperforming 62.81% of the companies in the same industry.
GAP's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.42% | ||
| PM (TTM) | 5.59% | ||
| GM | 41.28% |
OM growth 3Y11.89%
OM growth 5Y5.36%
PM growth 3Y53.87%
PM growth 5Y21.16%
GM growth 3Y1.21%
GM growth 5Y1.97%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so GAP is still creating some value.
Compared to 1 year ago, GAP has more shares outstanding
GAP has more shares outstanding than it did 5 years ago.
The debt/assets ratio for GAP has been reduced compared to a year ago.
2.2 Solvency
GAP has an Altman-Z score of 2.86. 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.
Looking at the Altman-Z score, with a value of 2.86, GAP is in the better half of the industry, outperforming 62.81% of the companies in the same industry.
GAP has a debt to FCF ratio of 1.43. This is a very positive value and a sign of high solvency as it would only need 1.43 years to pay back of all of its debts.
GAP has a better Debt to FCF ratio (1.43) than 75.21% of its industry peers.
GAP has a Debt/Equity ratio of 0.46. This is a healthy value indicating a solid balance between debt and equity.
GAP has a Debt to Equity ratio of 0.46. This is comparable to the rest of the industry: GAP outperforms 48.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | 1.43 | ||
| Altman-Z | 2.86 |
ROIC/WACC1.12
WACC9.55%
2.3 Liquidity
A Current Ratio of 1.60 indicates that GAP should not have too much problems paying its short term obligations.
GAP has a Current ratio of 1.60. This is in the better half of the industry: GAP outperforms 65.29% of its industry peers.
GAP has a Quick Ratio of 1.60. This is a bad value and indicates that GAP is not financially healthy enough and could expect problems in meeting its short term obligations.
GAP has a Quick ratio of 0.96. This is in the better half of the industry: GAP outperforms 71.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.6 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
GAP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 54.55%, which is quite impressive.
GAP shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.22% yearly.
GAP shows a small growth in Revenue. In the last year, the Revenue has grown by 1.32%.
The Revenue has been decreasing by -1.64% on average over the past years.
EPS 1Y (TTM)54.55%
EPS 3Y15.62%
EPS 5Y2.22%
EPS Q2Q%10.2%
Revenue 1Y (TTM)1.32%
Revenue growth 3Y-3.27%
Revenue growth 5Y-1.64%
Sales Q2Q%-3.47%
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 6.09% on average per year.
The Revenue is expected to grow by 1.79% on average over the next years.
EPS Next Y3.31%
EPS Next 2Y4.57%
EPS Next 3Y2.51%
EPS Next 5Y6.09%
Revenue Next Year1.42%
Revenue Next 2Y1.53%
Revenue Next 3Y1.31%
Revenue Next 5Y1.79%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 12.62, GAP is valued correctly.
Based on the Price/Earnings ratio, GAP is valued a bit cheaper than the industry average as 79.34% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 26.60. GAP is valued rather cheaply when compared to this.
GAP is valuated correctly with a Price/Forward Earnings ratio of 12.22.
GAP's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. GAP is cheaper than 73.55% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of GAP to the average of the S&P500 Index (22.43), we can say GAP is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.62 | ||
| Fwd PE | 12.22 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GAP indicates a somewhat cheap valuation: GAP is cheaper than 78.51% of the companies listed in the same industry.
GAP's Price/Free Cash Flow ratio is rather cheap when compared to the industry. GAP is cheaper than 82.64% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.11 | ||
| EV/EBITDA | 5.61 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of GAP may justify a higher PE ratio.
PEG (NY)3.82
PEG (5Y)5.68
EPS Next 2Y4.57%
EPS Next 3Y2.51%
5. Dividend
5.1 Amount
GAP has a Yearly Dividend Yield of 2.50%. 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 5.10. GAP pays more dividend than 84.30% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, GAP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.5% |
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 Years3
Div Non Decr Years4
5.3 Sustainability
26.66% of the earnings are spent on dividend by GAP. This is a low number and sustainable payout ratio.
DP26.66%
EPS Next 2Y4.57%
EPS Next 3Y2.51%
NYSE:GAP (5/21/2025, 11:02:05 AM)
27.895
+0.18 (+0.67%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners64.11%
Inst Owner ChangeN/A
Ins Owners40.49%
Ins Owner Change40.07%
Market Cap10.51B
Analysts74.78
Price Target26.21 (-6.04%)
Short Float %10.43%
Short Ratio2.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.5% |
Yearly Dividend0.6
Dividend Growth(5Y)-9.1%
DP26.66%
Div Incr Years3
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)33.94%
Min EPS beat(2)23.43%
Max EPS beat(2)44.45%
EPS beat(4)4
Avg EPS beat(4)72.2%
Min EPS beat(4)23.43%
Max EPS beat(4)188.17%
EPS beat(8)8
Avg EPS beat(8)121.17%
EPS beat(12)10
Avg EPS beat(12)10197.9%
EPS beat(16)13
Avg EPS beat(16)7717.37%
Revenue beat(2)1
Avg Revenue beat(2)0.15%
Min Revenue beat(2)-0.55%
Max Revenue beat(2)0.85%
Revenue beat(4)3
Avg Revenue beat(4)0.96%
Min Revenue beat(4)-0.55%
Max Revenue beat(4)2.08%
Revenue beat(8)5
Avg Revenue beat(8)0.67%
Revenue beat(12)6
Avg Revenue beat(12)0.54%
Revenue beat(16)8
Avg Revenue beat(16)0.62%
PT rev (1m)-8.66%
PT rev (3m)-12.52%
EPS NQ rev (1m)0.49%
EPS NQ rev (3m)-0.28%
EPS NY rev (1m)-0.83%
EPS NY rev (3m)4.61%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.78%
Revenue NY rev (1m)-0.12%
Revenue NY rev (3m)-0.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.62 | ||
| Fwd PE | 12.22 | ||
| P/S | 0.7 | ||
| P/FCF | 10.11 | ||
| P/OCF | 7.07 | ||
| P/B | 3.22 | ||
| P/tB | 3.22 | ||
| EV/EBITDA | 5.61 |
EPS(TTM)2.21
EY7.92%
EPS(NY)2.28
Fwd EY8.18%
FCF(TTM)2.76
FCFY9.89%
OCF(TTM)3.95
OCFY14.15%
SpS40.06
BVpS8.67
TBVpS8.67
PEG (NY)3.82
PEG (5Y)5.68
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.1% | ||
| ROE | 25.86% | ||
| ROCE | 12.98% | ||
| ROIC | 10.68% | ||
| ROICexc | 15.25% | ||
| ROICexgc | 15.25% | ||
| OM | 7.42% | ||
| PM (TTM) | 5.59% | ||
| GM | 41.28% | ||
| FCFM | 6.89% |
ROA(3y)3.29%
ROA(5y)1.41%
ROE(3y)12.05%
ROE(5y)4.02%
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
ROICexcg growth 3Y18.13%
ROICexcg growth 5Y12.19%
ROICexc growth 3Y17.89%
ROICexc growth 5Y11.77%
OM growth 3Y11.89%
OM growth 5Y5.36%
PM growth 3Y53.87%
PM growth 5Y21.16%
GM growth 3Y1.21%
GM growth 5Y1.97%
F-Score8
Asset Turnover1.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | 1.43 | ||
| Debt/EBITDA | 0.92 | ||
| Cap/Depr | 89.4% | ||
| Cap/Sales | 2.96% | ||
| Interest Coverage | 17.78 | ||
| Cash Conversion | 91.73% | ||
| Profit Quality | 123.1% | ||
| Current Ratio | 1.6 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 2.86 |
F-Score8
WACC9.55%
ROIC/WACC1.12
Cap/Depr(3y)98.9%
Cap/Depr(5y)102.35%
Cap/Sales(3y)3.39%
Cap/Sales(5y)3.43%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)54.55%
EPS 3Y15.62%
EPS 5Y2.22%
EPS Q2Q%10.2%
EPS Next Y3.31%
EPS Next 2Y4.57%
EPS Next 3Y2.51%
EPS Next 5Y6.09%
Revenue 1Y (TTM)1.32%
Revenue growth 3Y-3.27%
Revenue growth 5Y-1.64%
Sales Q2Q%-3.47%
Revenue Next Year1.42%
Revenue Next 2Y1.53%
Revenue Next 3Y1.31%
Revenue Next 5Y1.79%
EBIT growth 1Y74.18%
EBIT growth 3Y8.23%
EBIT growth 5Y3.64%
EBIT Next Year66.83%
EBIT Next 3Y20.7%
EBIT Next 5Y10.69%
FCF growth 1Y-6.56%
FCF growth 3Y108.28%
FCF growth 5Y23.2%
OCF growth 1Y-3%
OCF growth 3Y22.47%
OCF growth 5Y1.04%