GAP INC/THE (GAP) Stock Fundamental Analysis
NYSE:GAP - New York Stock Exchange, Inc. - US3647601083 - Common Stock - Currency: USD
Taking everything into account, GAP scores 5 out of 10 in our fundamental rating. GAP was compared to 121 industry peers in the Specialty Retail industry. While GAP has a great profitability rating, there are some minor concerns on its financial health. GAP scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
GAP had positive earnings in the past year.
GAP had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: GAP reported negative net income in multiple years.
GAP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 7.60%, GAP is doing good in the industry, outperforming 79.34% of the companies in the same industry.
GAP has a Return On Equity of 26.47%. This is amongst the best in the industry. GAP outperforms 83.47% of its industry peers.
Looking at the Return On Invested Capital, with a value of 11.03%, GAP is in the better half of the industry, outperforming 77.69% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.6% | ||
| ROE | 26.47% | ||
| ROIC | 11.03% |
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
With an excellent Profit Margin value of 5.80%, GAP belongs to the best of the industry, outperforming 80.99% of the companies in the same industry.
In the last couple of years the Profit Margin of GAP has grown nicely.
GAP's Operating Margin of 7.70% is fine compared to the rest of the industry. GAP outperforms 78.51% of its industry peers.
In the last couple of years the Operating Margin of GAP has grown nicely.
Looking at the Gross Margin, with a value of 41.41%, GAP is in the better half of the industry, outperforming 63.64% of the companies in the same industry.
In the last couple of years the Gross Margin of GAP has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.7% | ||
| PM (TTM) | 5.8% | ||
| GM | 41.41% |
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.
The number of shares outstanding for GAP has been increased compared to 1 year ago.
The number of shares outstanding for GAP has been increased compared to 5 years ago.
GAP has a better debt/assets ratio than last year.
2.2 Solvency
GAP has a debt to FCF ratio of 1.70. This is a very positive value and a sign of high solvency as it would only need 1.70 years to pay back of all of its debts.
The Debt to FCF ratio of GAP (1.70) is better than 78.51% of its industry peers.
A Debt/Equity ratio of 0.45 indicates that GAP is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.45, GAP is in line with its industry, outperforming 51.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 1.7 | ||
| Altman-Z | N/A |
ROIC/WACC1.2
WACC9.21%
2.3 Liquidity
GAP has a Current Ratio of 1.71. This is a normal value and indicates that GAP is financially healthy and should not expect problems in meeting its short term obligations.
GAP has a better Current ratio (1.71) than 74.38% of its industry peers.
A Quick Ratio of 0.98 indicates that GAP may have some problems paying its short term obligations.
GAP has a better Quick ratio (0.98) than 77.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.71 | ||
| Quick Ratio | 0.98 |
3. Growth
3.1 Past
GAP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.23%, which is quite impressive.
Measured over the past 5 years, GAP shows a small growth in Earnings Per Share. The EPS has been growing by 2.22% on average per year.
The Revenue has been growing slightly by 1.07% in the past year.
Measured over the past years, GAP shows a decrease in Revenue. The Revenue has been decreasing by -1.64% on average per year.
EPS 1Y (TTM)26.23%
EPS 3Y15.62%
EPS 5Y2.22%
EPS Q2Q%24.39%
Revenue 1Y (TTM)1.07%
Revenue growth 3Y-3.27%
Revenue growth 5Y-1.64%
Sales Q2Q%2.21%
3.2 Future
GAP is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.09% yearly.
Based on estimates for the next years, GAP will show a small growth in Revenue. The Revenue will grow by 1.79% on average per year.
EPS Next Y0.57%
EPS Next 2Y3.64%
EPS Next 3Y5.56%
EPS Next 5Y6.09%
Revenue Next Year2.04%
Revenue Next 2Y2%
Revenue Next 3Y1.9%
Revenue Next 5Y1.79%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
The Price/Earnings ratio is 9.71, which indicates a very decent valuation of GAP.
Based on the Price/Earnings ratio, GAP is valued cheaper than 85.95% of the companies in the same industry.
GAP's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.21.
Based on the Price/Forward Earnings ratio of 9.45, the valuation of GAP can be described as reasonable.
81.82% of the companies in the same industry are more expensive than GAP, based on the Price/Forward Earnings ratio.
GAP is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.70, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.71 | ||
| Fwd PE | 9.45 |
4.2 Price Multiples
85.95% of the companies in the same industry are more expensive than GAP, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GAP indicates a rather cheap valuation: GAP is cheaper than 84.30% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.61 | ||
| EV/EBITDA | 4.5 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
GAP has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)16.93
PEG (5Y)4.37
EPS Next 2Y3.64%
EPS Next 3Y5.56%
5. Dividend
5.1 Amount
GAP has a Yearly Dividend Yield of 3.00%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 5.27, GAP pays a better dividend. On top of this GAP pays more dividend than 89.26% of the companies listed in the same industry.
GAP's Dividend Yield is a higher than the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3% |
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
5.3 Sustainability
26.17% of the earnings are spent on dividend by GAP. This is a low number and sustainable payout ratio.
DP26.17%
EPS Next 2Y3.64%
EPS Next 3Y5.56%
NYSE:GAP (7/2/2025, 3:42:05 PM)
22.435
-0.03 (-0.11%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners64.38%
Inst Owner ChangeN/A
Ins Owners39.16%
Ins Owner Change40.2%
Market Cap8.45B
Analysts74.78
Price Target26.85 (19.68%)
Short Float %6.29%
Short Ratio1.37
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3% |
Yearly Dividend0.6
Dividend Growth(5Y)-9.1%
DP26.17%
Div Incr Years0
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)27.94%
Min EPS beat(2)11.43%
Max EPS beat(2)44.45%
EPS beat(4)4
Avg EPS beat(4)28.02%
Min EPS beat(4)11.43%
Max EPS beat(4)44.45%
EPS beat(8)8
Avg EPS beat(8)109.32%
EPS beat(12)11
Avg EPS beat(12)10218.5%
EPS beat(16)13
Avg EPS beat(16)7654.76%
Revenue beat(2)2
Avg Revenue beat(2)0.54%
Min Revenue beat(2)0.23%
Max Revenue beat(2)0.85%
Revenue beat(4)3
Avg Revenue beat(4)0.5%
Min Revenue beat(4)-0.55%
Max Revenue beat(4)1.47%
Revenue beat(8)6
Avg Revenue beat(8)0.86%
Revenue beat(12)7
Avg Revenue beat(12)0.59%
Revenue beat(16)8
Avg Revenue beat(16)-0.29%
PT rev (1m)2.43%
PT rev (3m)-6.44%
EPS NQ rev (1m)-2%
EPS NQ rev (3m)-4.52%
EPS NY rev (1m)-2.65%
EPS NY rev (3m)-7.97%
Revenue NQ rev (1m)0.19%
Revenue NQ rev (3m)-0.13%
Revenue NY rev (1m)0.62%
Revenue NY rev (3m)0.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.71 | ||
| Fwd PE | 9.45 | ||
| P/S | 0.56 | ||
| P/FCF | 9.61 | ||
| P/OCF | 6.42 | ||
| P/B | 2.54 | ||
| P/tB | 2.54 | ||
| EV/EBITDA | 4.5 |
EPS(TTM)2.31
EY10.3%
EPS(NY)2.37
Fwd EY10.58%
FCF(TTM)2.33
FCFY10.4%
OCF(TTM)3.49
OCFY15.58%
SpS40.26
BVpS8.82
TBVpS8.82
PEG (NY)16.93
PEG (5Y)4.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.6% | ||
| ROE | 26.47% | ||
| ROCE | 13.41% | ||
| ROIC | 11.03% | ||
| ROICexc | 14.8% | ||
| ROICexgc | 14.8% | ||
| OM | 7.7% | ||
| PM (TTM) | 5.8% | ||
| GM | 41.41% | ||
| FCFM | 5.8% |
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 Turnover1.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 1.7 | ||
| Debt/EBITDA | 0.89 | ||
| Cap/Depr | 87.93% | ||
| Cap/Sales | 2.88% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.04% | ||
| Profit Quality | 100% | ||
| Current Ratio | 1.71 | ||
| Quick Ratio | 0.98 | ||
| Altman-Z | N/A |
F-Score8
WACC9.21%
ROIC/WACC1.2
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)26.23%
EPS 3Y15.62%
EPS 5Y2.22%
EPS Q2Q%24.39%
EPS Next Y0.57%
EPS Next 2Y3.64%
EPS Next 3Y5.56%
EPS Next 5Y6.09%
Revenue 1Y (TTM)1.07%
Revenue growth 3Y-3.27%
Revenue growth 5Y-1.64%
Sales Q2Q%2.21%
Revenue Next Year2.04%
Revenue Next 2Y2%
Revenue Next 3Y1.9%
Revenue Next 5Y1.79%
EBIT growth 1Y39.55%
EBIT growth 3Y8.23%
EBIT growth 5Y3.64%
EBIT Next Year60.17%
EBIT Next 3Y19.21%
EBIT Next 5Y10.69%
FCF growth 1Y114.39%
FCF growth 3Y108.28%
FCF growth 5Y23.2%
OCF growth 1Y33.74%
OCF growth 3Y22.47%
OCF growth 5Y1.04%