GAP INC/THE (GAP) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:GAP - US3647601083 - Common Stock
26.6 USD
+1.85 (+7.47%)
26.78 USD
+0.18 (+0.68%)
Overall GAP gets a fundamental rating of 5 out of 10. We evaluated GAP against 122 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
In the past year GAP was profitable.
In the past year GAP had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: GAP reported negative net income in multiple 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 6.88%, GAP is in the better half of the industry, outperforming 78.69% of the companies in the same industry.
Looking at the Return On Equity, with a value of 23.33%, GAP belongs to the top of the industry, outperforming 82.79% of the companies in the same industry.
With a decent Return On Invested Capital value of 10.37%, GAP is doing good in the industry, outperforming 75.41% 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 has a better Profit Margin (5.57%) than 79.51% of its industry peers.
In the last couple of years the Profit Margin of GAP has grown nicely.
GAP's Operating Margin of 7.50% is fine compared to the rest of the industry. GAP outperforms 76.23% of its industry peers.
In the last couple of years the Operating Margin of GAP has grown nicely.
With a decent Gross Margin value of 41.01%, GAP is doing good in 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so GAP is still creating some value.
Compared to 1 year ago, GAP has more shares outstanding
Compared to 5 years ago, GAP has more shares outstanding
GAP has a better debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of GAP is 1.91, which is an excellent value as it means it would take GAP, only 1.91 years of fcf income to pay off 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 of 0.41. This is comparable to the rest of the industry: GAP outperforms 57.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 1.91 | ||
| Altman-Z | N/A |
ROIC/WACC1.14
WACC9.13%
2.3 Liquidity
A Current Ratio of 1.72 indicates that GAP should not have too much problems paying its short term obligations.
GAP has a Current ratio of 1.72. This is in the better half of the industry: GAP outperforms 74.59% of its industry peers.
A Quick Ratio of 0.97 indicates that GAP may have some problems paying its short term obligations.
The Quick ratio of GAP (0.97) is better than 74.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.72 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.70% over the past year.
GAP shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.22% yearly.
The Revenue has been growing slightly by 0.29% in the past year.
The Revenue has been decreasing by -1.64% on average over the past years.
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
Based on the Price/Earnings ratio of 11.88, the valuation of GAP can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of GAP indicates a rather cheap valuation: GAP is cheaper than 80.33% of the companies listed in the same industry.
GAP's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.98.
Based on the Price/Forward Earnings ratio of 12.10, the valuation of GAP can be described as correct.
73.77% 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 35.79, GAP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.88 | ||
| Fwd PE | 12.1 |
4.2 Price Multiples
86.07% of the companies in the same industry are more expensive than GAP, based on the Enterprise Value to EBITDA ratio.
GAP's Price/Free Cash Flow ratio is rather cheap when compared to the industry. GAP is cheaper than 81.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.67 | ||
| EV/EBITDA | 5.23 |
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)5.34
EPS Next 2Y-0.24%
EPS Next 3Y5.3%
5. Dividend
5.1 Amount
GAP has a Yearly Dividend Yield of 2.67%.
GAP's Dividend Yield is rather good when compared to the industry average which is at 6.07. GAP pays more dividend than 84.43% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, GAP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
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
28.32% of the earnings are spent on dividend by GAP. This is a low number and sustainable payout ratio.
DP28.32%
EPS Next 2Y-0.24%
EPS Next 3Y5.3%
26.6
+1.85 (+7.47%)
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 Change0.2%
Market Cap9.87B
Revenue(TTM)15.28B
Net Income(TTM)851.00M
Analysts73.33
Price Target25.56 (-3.91%)
Short Float %9.83%
Short Ratio2.5
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
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)1.26%
EPS NQ rev (3m)-10.64%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.95%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)-0.1%
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 | 12.67 | ||
| P/OCF | 8.07 | ||
| P/B | 2.71 | ||
| P/tB | 2.71 | ||
| EV/EBITDA | 5.23 |
EPS(TTM)2.24
EY8.42%
EPS(NY)2.2
Fwd EY8.27%
FCF(TTM)2.1
FCFY7.89%
OCF(TTM)3.3
OCFY12.39%
SpS41.18
BVpS9.83
TBVpS9.83
PEG (NY)N/A
PEG (5Y)5.34
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 | 250 | ||
| Cash Conversion | 74.44% | ||
| Profit Quality | 91.54% | ||
| Current Ratio | 1.72 | ||
| Quick Ratio | 0.97 | ||
| Altman-Z | N/A |
F-Score6
WACC9.13%
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 5 / 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 4 / 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%.