Don't overlook NYSE:GPS—it's a hidden gem with strong fundamentals and an attractive price tag.

Consider GAP INC/THE (NYSE:GPS) as a top value stock, identified by our stock screening tool. NYSE:GPS shines in terms of profitability, solvency, and liquidity, all while remaining very reasonably priced. Let's dive deeper into the analysis.

Valuation Assessment of NYSE:GPS

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:GPS boasts a 7 out of 10:

• 79.03% of the companies in the same industry are more expensive than GPS, based on the Price/Earnings ratio.
• GPS is valuated cheaply when we compare the Price/Earnings ratio to 28.32, which is the current average of the S&P500 Index.
• With a Price/Forward Earnings ratio of 11.88, the valuation of GPS can be described as very reasonable.
• 72.58% of the companies in the same industry are more expensive than GPS, based on the Price/Forward Earnings ratio.
• GPS's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 20.13.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GPS indicates a somewhat cheap valuation: GPS is cheaper than 78.23% of the companies listed in the same industry.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of GPS indicates a rather cheap valuation: GPS is cheaper than 87.90% of the companies listed in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• GPS's earnings are expected to grow with 16.21% in the coming years. This may justify a more expensive valuation.

What does the Profitability looks like for NYSE:GPS

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:GPS has earned a 5 out of 10:

• GPS's Return On Assets of 6.22% is fine compared to the rest of the industry. GPS outperforms 70.97% of its industry peers.
• GPS has a better Return On Equity (25.05%) than 80.65% of its industry peers.
• With a decent Return On Invested Capital value of 9.33%, GPS is doing good in the industry, outperforming 70.97% of the companies in the same industry.
• GPS has a Profit Margin of 4.52%. This is in the better half of the industry: GPS outperforms 73.39% of its industry peers.
• GPS has a better Operating Margin (5.58%) than 65.32% of its industry peers.

Health Assessment of NYSE:GPS

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:GPS has received a 5 out of 10:

• GPS has a debt to FCF ratio of 1.29. This is a very positive value and a sign of high solvency as it would only need 1.29 years to pay back of all of its debts.
• Looking at the Debt to FCF ratio, with a value of 1.29, GPS is in the better half of the industry, outperforming 76.61% of the companies in the same industry.
• Even though the debt/equity ratio score it not favorable for GPS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
• The Quick ratio of GPS (0.80) is better than 66.13% of its industry peers.

Evaluating Growth: NYSE:GPS

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:GPS scores a 4 out of 10:

• GPS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 1116.67%, which is quite impressive.
• The Earnings Per Share is expected to grow by 14.94% on average over the next years. This is quite good.
• 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.
• The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Check the latest full fundamental report of GPS for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.