GAP INC/THE (GAP)
US3647601083 - Common Stock
GAP gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 123 industry peers in the Specialty Retail industry. GAP has only an average score on both its financial health and profitability. GAP is valued quite cheap, while showing a decent growth score. This is a good combination! This makes GAP very considerable for value investing!
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.
In the past 5 years GAP always reported a positive cash flow from operatings.
1.2 Ratios
GAP has a Return On Assets of 6.22%. This is in the better half of the industry: GAP outperforms 72.73% of its industry peers.
GAP's Return On Equity of 25.05% is amongst the best of the industry. GAP outperforms 80.99% of its industry peers.
Looking at the Return On Invested Capital, with a value of 9.33%, GAP is in the better half of the industry, outperforming 72.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.22% | ||
| ROE | 25.05% | ||
| ROIC | 9.33% |
ROA(3y)1.59%
ROA(5y)0.5%
ROE(3y)6.57%
ROE(5y)0.97%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
GAP has a Profit Margin of 4.52%. This is in the better half of the industry: GAP outperforms 76.03% of its industry peers.
In the last couple of years the Profit Margin of GAP has declined.
GAP has a Operating Margin of 5.58%. This is in the better half of the industry: GAP outperforms 71.07% of its industry peers.
In the last couple of years the Operating Margin of GAP has declined.
GAP has a better Gross Margin (39.72%) than 60.33% of its industry peers.
In the last couple of years the Gross Margin of GAP has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.58% | ||
| PM (TTM) | 4.52% | ||
| GM | 39.72% |
OM growth 3YN/A
OM growth 5Y-13.49%
PM growth 3YN/A
PM growth 5Y-11.03%
GM growth 3Y4.42%
GM growth 5Y0.36%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), GAP is destroying value.
The number of shares outstanding for GAP has been increased compared to 1 year ago.
GAP has less shares outstanding than it did 5 years ago.
GAP has a better debt/assets ratio than last year.
2.2 Solvency
GAP has an Altman-Z score of 2.69. 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.
GAP has a Altman-Z score of 2.69. This is in the better half of the industry: GAP outperforms 60.33% of its industry peers.
GAP 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, GAP is in the better half of the industry, outperforming 78.51% of the companies in the same industry.
GAP has a Debt/Equity ratio of 0.55. This is a neutral value indicating GAP is somewhat dependend on debt financing.
GAP has a Debt to Equity ratio (0.55) which is comparable to the rest of the industry.
Even though the debt/equity ratio score it not favorable for GAP, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 1.29 | ||
| Altman-Z | 2.69 |
ROIC/WACC0.99
WACC9.41%
2.3 Liquidity
A Current Ratio of 1.50 indicates that GAP should not have too much problems paying its short term obligations.
GAP's Current ratio of 1.50 is in line compared to the rest of the industry. GAP outperforms 58.68% of its industry peers.
A Quick Ratio of 0.80 indicates that GAP may have some problems paying its short term obligations.
GAP's Quick ratio of 0.80 is fine compared to the rest of the industry. GAP outperforms 67.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.5 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
GAP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10250.00%, which is quite impressive.
GAP shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -11.20% yearly.
Looking at the last year, GAP shows a decrease in Revenue. The Revenue has decreased by -4.66% in the last year.
Measured over the past years, GAP shows a decrease in Revenue. The Revenue has been decreasing by -2.13% on average per year.
EPS 1Y (TTM)10250%
EPS 3YN/A
EPS 5Y-11.2%
EPS Q2Q%58.82%
Revenue 1Y (TTM)-4.66%
Revenue growth 3Y2.56%
Revenue growth 5Y-2.13%
Sales Q2Q%4.85%
3.2 Future
GAP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.94% yearly.
The Revenue is expected to grow by 1.47% on average over the next years.
EPS Next Y32.15%
EPS Next 2Y20.12%
EPS Next 3Y16.09%
EPS Next 5Y14.94%
Revenue Next Year1.06%
Revenue Next 2Y1.44%
Revenue Next 3Y1.53%
Revenue Next 5Y1.47%
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 10.52, which indicates a very decent valuation of GAP.
Based on the Price/Earnings ratio, GAP is valued cheaper than 87.60% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.65, GAP is valued rather cheaply.
GAP is valuated reasonably with a Price/Forward Earnings ratio of 10.35.
81.82% of the companies in the same industry are more expensive than GAP, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.50, GAP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.52 | ||
| Fwd PE | 10.35 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GAP is valued cheaper than 86.78% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, GAP is valued cheaply inside the industry as 93.39% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.98 | ||
| EV/EBITDA | 5.64 |
4.3 Compensation for Growth
GAP's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
GAP's earnings are expected to grow with 16.09% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.33
PEG (5Y)N/A
EPS Next 2Y20.12%
EPS Next 3Y16.09%
5. Dividend
5.1 Amount
GAP has a Yearly Dividend Yield of 2.79%. 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 3.10. GAP pays more dividend than 90.08% of the companies in the same industry.
GAP's Dividend Yield is a higher than the S&P500 average which is at 2.22.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.79% |
5.2 History
The dividend of GAP decreases each year by -9.16%.
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)-9.16%
Div Incr Years3
Div Non Decr Years4
5.3 Sustainability
GAP pays out 32.89% of its income as dividend. This is a sustainable payout ratio.
DP32.89%
EPS Next 2Y20.12%
EPS Next 3Y16.09%
GAP INC/THE
NYSE:GAP (11/18/2024, 8:04:01 PM)
Premarket: 21.4 +0.04 (+0.19%)21.36
-0.16 (-0.74%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap8.04B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.79% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.52 | ||
| Fwd PE | 10.35 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.33
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.22% | ||
| ROE | 25.05% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 5.58% | ||
| PM (TTM) | 4.52% | ||
| GM | 39.72% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.5 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)10250%
EPS 3YN/A
EPS 5Y
EPS Q2Q%
EPS Next Y32.15%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-4.66%
Revenue growth 3Y2.56%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y