GAP INC/THE (GAP) Stock Fundamental Analysis
USA - NYSE:GAP - US3647601083 - Common Stock
23.46 USD
+0.68 (+2.99%)
23.35 USD
-0.11 (-0.47%)
We assign a fundamental rating of 6 out of 10 to GAP. GAP was compared to 121 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 may be a bit undervalued, certainly considering the very reasonable score on growth These ratings would make GAP suitable for value investing!
1. Profitability
1.1 Basic Checks
In the past year GAP was profitable.
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.
Each year in the past 5 years GAP had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.32%, GAP belongs to the top of the industry, outperforming 80.17% of the companies in the same industry.
GAP has a better Return On Equity (25.90%) than 83.47% of its industry peers.
The Return On Invested Capital of GAP (10.73%) is better than 75.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.32% | ||
| ROE | 25.9% | ||
| ROIC | 10.73% |
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
The Profit Margin of GAP (5.86%) is better than 79.34% of its industry peers.
GAP's Profit Margin has improved in the last couple of years.
GAP has a better Operating Margin (7.69%) than 76.03% 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 41.09%, GAP is in the better half of the industry, outperforming 64.46% of the companies in the same industry.
GAP's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.69% | ||
| PM (TTM) | 5.86% | ||
| GM | 41.09% |
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
Compared to 5 years ago, GAP has more shares outstanding
Compared to 1 year ago, GAP has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.75 indicates that GAP is not a great score, but indicates only limited risk for bankruptcy at the moment.
GAP has a better Altman-Z score (2.75) than 62.81% of its industry peers.
The Debt to FCF ratio of GAP is 1.94, which is an excellent value as it means it would take GAP, only 1.94 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of GAP (1.94) is better than 76.03% of its industry peers.
A Debt/Equity ratio of 0.43 indicates that GAP is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.43, GAP perfoms like the industry average, outperforming 56.20% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 1.94 | ||
| Altman-Z | 2.75 |
ROIC/WACC1.19
WACC9.02%
2.3 Liquidity
GAP has a Current Ratio of 1.68. This is a normal value and indicates that GAP is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Current ratio value of 1.68, GAP is doing good in the industry, outperforming 72.73% of the companies in the same industry.
GAP has a Quick Ratio of 1.68. This is a bad value and indicates that GAP is not financially healthy enough and could expect problems in meeting its short term obligations.
With a decent Quick ratio value of 0.96, GAP is doing good in the industry, outperforming 73.55% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.68 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 15.27% over the past year.
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.
Looking at the last year, GAP shows a decrease in Revenue. The Revenue has decreased by -0.05% in the last year.
The Revenue has been decreasing by -1.64% on average over the past years.
EPS 1Y (TTM)15.27%
EPS 3Y15.62%
EPS 5Y2.22%
EPS Q2Q%5.56%
Revenue 1Y (TTM)-0.05%
Revenue growth 3Y-3.27%
Revenue growth 5Y-1.64%
Sales Q2Q%0.13%
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.
GAP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.59% yearly.
EPS Next Y-4.76%
EPS Next 2Y-0.24%
EPS Next 3Y3.91%
EPS Next 5Y5.43%
Revenue Next Year1.96%
Revenue Next 2Y2.02%
Revenue Next 3Y1.9%
Revenue Next 5Y1.59%
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 10.03, which indicates a very decent valuation of GAP.
Compared to the rest of the industry, the Price/Earnings ratio of GAP indicates a rather cheap valuation: GAP is cheaper than 83.47% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of GAP to the average of the S&P500 Index (25.83), we can say GAP is valued rather cheaply.
A Price/Forward Earnings ratio of 10.67 indicates a reasonable valuation of GAP.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GAP indicates a rather cheap valuation: GAP is cheaper than 80.17% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 32.68, GAP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.03 | ||
| Fwd PE | 10.67 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GAP indicates a rather cheap valuation: GAP is cheaper than 90.91% of the companies listed in the same industry.
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 | 11.32 | ||
| EV/EBITDA | 4.37 |
4.3 Compensation for Growth
GAP has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)4.51
EPS Next 2Y-0.24%
EPS Next 3Y3.91%
5. Dividend
5.1 Amount
GAP has a Yearly Dividend Yield of 2.84%.
GAP's Dividend Yield is rather good when compared to the industry average which is at 5.51. GAP pays more dividend than 85.95% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, GAP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.84% |
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
26.55% of the earnings are spent on dividend by GAP. This is a low number and sustainable payout ratio.
DP26.55%
EPS Next 2Y-0.24%
EPS Next 3Y3.91%
23.46
+0.68 (+2.99%)
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 Change0.16%
Market Cap8.70B
Revenue(TTM)15.17B
Net Income(TTM)889.00M
Analysts72.17
Price Target24.78 (5.63%)
Short Float %9.16%
Short Ratio2.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.84% |
Yearly Dividend0.6
Dividend Growth(5Y)-9.1%
DP26.55%
Div Incr Years0
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.08%
Min EPS beat(2)2.72%
Max EPS beat(2)11.43%
EPS beat(4)4
Avg EPS beat(4)20.51%
Min EPS beat(4)2.72%
Max EPS beat(4)44.45%
EPS beat(8)8
Avg EPS beat(8)77.43%
EPS beat(12)11
Avg EPS beat(12)10182.5%
EPS beat(16)13
Avg EPS beat(16)7651.75%
Revenue beat(2)1
Avg Revenue beat(2)-0.53%
Min Revenue beat(2)-1.3%
Max Revenue beat(2)0.23%
Revenue beat(4)2
Avg Revenue beat(4)-0.19%
Min Revenue beat(4)-1.3%
Max Revenue beat(4)0.85%
Revenue beat(8)6
Avg Revenue beat(8)0.91%
Revenue beat(12)7
Avg Revenue beat(12)0.49%
Revenue beat(16)7
Avg Revenue beat(16)-0.43%
PT rev (1m)1.54%
PT rev (3m)-7.95%
EPS NQ rev (1m)0.14%
EPS NQ rev (3m)-13.81%
EPS NY rev (1m)0.2%
EPS NY rev (3m)-5.41%
Revenue NQ rev (1m)-0.05%
Revenue NQ rev (3m)-0.2%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.03 | ||
| Fwd PE | 10.67 | ||
| P/S | 0.57 | ||
| P/FCF | 11.32 | ||
| P/OCF | 7.16 | ||
| P/B | 2.54 | ||
| P/tB | 2.54 | ||
| EV/EBITDA | 4.37 |
EPS(TTM)2.34
EY9.97%
EPS(NY)2.2
Fwd EY9.37%
FCF(TTM)2.07
FCFY8.83%
OCF(TTM)3.27
OCFY13.96%
SpS40.87
BVpS9.25
TBVpS9.25
PEG (NY)N/A
PEG (5Y)4.51
Graham Number22.07
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.32% | ||
| ROE | 25.9% | ||
| ROCE | 13.04% | ||
| ROIC | 10.73% | ||
| ROICexc | 14.73% | ||
| ROICexgc | 14.73% | ||
| OM | 7.69% | ||
| PM (TTM) | 5.86% | ||
| GM | 41.09% | ||
| FCFM | 5.07% |
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-Score8
Asset Turnover1.25
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 1.94 | ||
| Debt/EBITDA | 0.9 | ||
| Cap/Depr | 89.92% | ||
| Cap/Sales | 2.94% | ||
| Interest Coverage | 18.23 | ||
| Cash Conversion | 73.06% | ||
| Profit Quality | 86.5% | ||
| Current Ratio | 1.68 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 2.75 |
F-Score8
WACC9.02%
ROIC/WACC1.19
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)15.27%
EPS 3Y15.62%
EPS 5Y2.22%
EPS Q2Q%5.56%
EPS Next Y-4.76%
EPS Next 2Y-0.24%
EPS Next 3Y3.91%
EPS Next 5Y5.43%
Revenue 1Y (TTM)-0.05%
Revenue growth 3Y-3.27%
Revenue growth 5Y-1.64%
Sales Q2Q%0.13%
Revenue Next Year1.96%
Revenue Next 2Y2.02%
Revenue Next 3Y1.9%
Revenue Next 5Y1.59%
EBIT growth 1Y19.57%
EBIT growth 3Y8.23%
EBIT growth 5Y3.64%
EBIT Next Year51.05%
EBIT Next 3Y18.28%
EBIT Next 5Y10.54%
FCF growth 1Y-11%
FCF growth 3Y108.28%
FCF growth 5Y23.2%
OCF growth 1Y-9.46%
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 26.55%.