GAP INC/THE (GAP) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:GAP - US3647601083 - Common Stock
26.6143 USD
+0.1 (+0.39%)
Taking everything into account, GAP scores 6 out of 10 in our fundamental rating. GAP was compared to 122 industry peers in the Specialty Retail industry. While GAP belongs to the best of the industry regarding profitability, 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
In the past year GAP was profitable.
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
GAP's Return On Assets of 6.88% is fine compared to the rest of the industry. GAP outperforms 79.51% of its industry peers.
With an excellent Return On Equity value of 23.33%, GAP belongs to the best of the industry, outperforming 83.61% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 10.37%, GAP is in the better half of the industry, outperforming 77.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.88% | ||
| ROE | 23.33% | ||
| ROIC | 10.37% |
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's Profit Margin of 5.57% is fine compared to the rest of the industry. GAP outperforms 79.51% of its industry peers.
GAP's Profit Margin has improved in the last couple of years.
GAP's Operating Margin of 7.50% is fine compared to the rest of the industry. GAP outperforms 76.23% of its industry peers.
GAP's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 41.01%, GAP is in the better half of the industry, outperforming 63.93% of the companies in the same industry.
GAP's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.5% | ||
| PM (TTM) | 5.57% | ||
| GM | 41.01% |
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
GAP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, GAP has more shares outstanding
The number of shares outstanding for GAP has been increased compared to 5 years ago.
Compared to 1 year ago, GAP has an improved debt to assets ratio.
2.2 Solvency
GAP has an Altman-Z score of 2.84. 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 2.84, GAP is in the better half of the industry, outperforming 67.21% of the companies in the same industry.
GAP has a debt to FCF ratio of 1.91. This is a very positive value and a sign of high solvency as it would only need 1.91 years to pay back of all of its debts.
GAP's Debt to FCF ratio of 1.91 is fine compared to the rest of the industry. GAP outperforms 76.23% of its industry peers.
GAP has a Debt/Equity ratio of 0.41. This is a healthy value indicating a solid balance between debt and equity.
GAP has a Debt to Equity ratio (0.41) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 1.91 | ||
| Altman-Z | 2.84 |
ROIC/WACC1.14
WACC9.12%
2.3 Liquidity
GAP has a Current Ratio of 1.72. This is a normal value and indicates that GAP is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of GAP (1.72) is better than 74.59% of its industry peers.
GAP has a Quick Ratio of 1.72. 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 better Quick ratio (0.97) than 74.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.72 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
GAP shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.70%.
GAP shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.22% yearly.
Looking at the last year, GAP shows a small growth in Revenue. The Revenue has grown by 0.29% in the last year.
GAP shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.64% yearly.
EPS 1Y (TTM)3.7%
EPS 3Y15.62%
EPS 5Y2.22%
EPS Q2Q%-13.89%
Revenue 1Y (TTM)0.29%
Revenue growth 3Y-3.27%
Revenue growth 5Y-1.64%
Sales Q2Q%2.95%
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 5.43% on average per year.
The Revenue is expected to grow by 1.59% on average over the next years.
EPS Next Y-4.76%
EPS Next 2Y-0.24%
EPS Next 3Y5.3%
EPS Next 5Y5.43%
Revenue Next Year1.96%
Revenue Next 2Y2.01%
Revenue Next 3Y2.21%
Revenue Next 5Y1.59%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 11.88 indicates a reasonable valuation of GAP.
79.51% of the companies in the same industry are more expensive than GAP, based on the Price/Earnings ratio.
GAP is valuated cheaply when we compare the Price/Earnings ratio to 26.41, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 12.10, the valuation of GAP can be described as correct.
Based on the Price/Forward Earnings ratio, GAP is valued a bit cheaper than 74.59% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.40, GAP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.88 | ||
| Fwd PE | 12.1 |
4.2 Price Multiples
84.43% of the companies in the same industry are more expensive than GAP, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, GAP is valued cheaply inside the industry as 83.61% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.68 | ||
| EV/EBITDA | 5.21 |
4.3 Compensation for Growth
The decent profitability rating of GAP may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)5.35
EPS Next 2Y-0.24%
EPS Next 3Y5.3%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.40%, GAP has a reasonable but not impressive dividend return.
GAP's Dividend Yield is rather good when compared to the industry average which is at 5.65. GAP pays more dividend than 84.43% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, GAP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.4% |
5.2 History
The dividend of GAP decreases each year by -9.10%.
GAP has been paying a dividend for at least 10 years, so it has 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
GAP pays out 28.32% of its income as dividend. This is a sustainable payout ratio.
DP28.32%
EPS Next 2Y-0.24%
EPS Next 3Y5.3%
NYSE:GAP (12/5/2025, 1:30:07 PM)
26.6143
+0.1 (+0.39%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners59.48%
Inst Owner ChangeN/A
Ins Owners39.36%
Ins Owner Change0.11%
Market Cap9.88B
Revenue(TTM)15.28B
Net Income(TTM)851.00M
Analysts73.33
Price Target25.56 (-3.96%)
Short Float %9.33%
Short Ratio2.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.4% |
Yearly Dividend0.6
Dividend Growth(5Y)-9.1%
DP28.32%
Div Incr Years0
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.39%
Min EPS beat(2)2.72%
Max EPS beat(2)4.07%
EPS beat(4)4
Avg EPS beat(4)15.67%
Min EPS beat(4)2.72%
Max EPS beat(4)44.45%
EPS beat(8)8
Avg EPS beat(8)52.78%
EPS beat(12)11
Avg EPS beat(12)77.24%
EPS beat(16)14
Avg EPS beat(16)7654.91%
Revenue beat(2)0
Avg Revenue beat(2)-0.75%
Min Revenue beat(2)-1.3%
Max Revenue beat(2)-0.2%
Revenue beat(4)2
Avg Revenue beat(4)-0.1%
Min Revenue beat(4)-1.3%
Max Revenue beat(4)0.85%
Revenue beat(8)5
Avg Revenue beat(8)0.44%
Revenue beat(12)6
Avg Revenue beat(12)0.04%
Revenue beat(16)7
Avg Revenue beat(16)0.32%
PT rev (1m)4.47%
PT rev (3m)1.21%
EPS NQ rev (1m)5.68%
EPS NQ rev (3m)9%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.95%
Revenue NQ rev (1m)0.42%
Revenue NQ rev (3m)0.26%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.88 | ||
| Fwd PE | 12.1 | ||
| P/S | 0.65 | ||
| P/FCF | 12.68 | ||
| P/OCF | 8.07 | ||
| P/B | 2.71 | ||
| P/tB | 2.71 | ||
| EV/EBITDA | 5.21 |
EPS(TTM)2.24
EY8.42%
EPS(NY)2.2
Fwd EY8.26%
FCF(TTM)2.1
FCFY7.89%
OCF(TTM)3.3
OCFY12.38%
SpS41.18
BVpS9.83
TBVpS9.83
PEG (NY)N/A
PEG (5Y)5.35
Graham Number22.26
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.88% | ||
| ROE | 23.33% | ||
| ROCE | 12.61% | ||
| ROIC | 10.37% | ||
| ROICexc | 14.34% | ||
| ROICexgc | 14.34% | ||
| OM | 7.5% | ||
| PM (TTM) | 5.57% | ||
| GM | 41.01% | ||
| FCFM | 5.1% |
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
ROICexgc growth 3Y18.13%
ROICexgc 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-Score6
Asset Turnover1.24
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 1.91 | ||
| Debt/EBITDA | 0.91 | ||
| Cap/Depr | 89.34% | ||
| Cap/Sales | 2.91% | ||
| Interest Coverage | 18.19 | ||
| Cash Conversion | 74.44% | ||
| Profit Quality | 91.54% | ||
| Current Ratio | 1.72 | ||
| Quick Ratio | 0.97 | ||
| Altman-Z | 2.84 |
F-Score6
WACC9.12%
ROIC/WACC1.14
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)3.7%
EPS 3Y15.62%
EPS 5Y2.22%
EPS Q2Q%-13.89%
EPS Next Y-4.76%
EPS Next 2Y-0.24%
EPS Next 3Y5.3%
EPS Next 5Y5.43%
Revenue 1Y (TTM)0.29%
Revenue growth 3Y-3.27%
Revenue growth 5Y-1.64%
Sales Q2Q%2.95%
Revenue Next Year1.96%
Revenue Next 2Y2.01%
Revenue Next 3Y2.21%
Revenue Next 5Y1.59%
EBIT growth 1Y6.01%
EBIT growth 3Y8.23%
EBIT growth 5Y3.64%
EBIT Next Year51.05%
EBIT Next 3Y20.4%
EBIT Next 5Y10.54%
FCF growth 1Y-32.55%
FCF growth 3Y108.28%
FCF growth 5Y23.2%
OCF growth 1Y-21.15%
OCF growth 3Y22.47%
OCF growth 5Y1.04%
GAP INC/THE / GAP FAQ
What is the ChartMill fundamental rating of GAP INC/THE (GAP) stock?
ChartMill assigns a fundamental rating of 6 / 10 to GAP.
What is the valuation status of GAP INC/THE (GAP) stock?
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 7 / 10.
What is the financial health of GAP INC/THE (GAP) stock?
The financial health rating of GAP INC/THE (GAP) is 5 / 10.
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 28.32%.