GAP INC/THE (GAP) Stock Fundamental Analysis
USA - NYSE:GAP - US3647601083 - Common Stock
23.77 USD
-0.38 (-1.57%)
23.08 USD
-0.69 (-2.9%)
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 is valued quite cheap, while showing a decent growth score. This is a good combination! These ratings could make GAP a good candidate for value investing.
1. Profitability
1.1 Basic Checks
In the past year GAP was profitable.
GAP had a positive operating cash flow in the past year.
In multiple years GAP reported negative net income over the last 5 years.
In the past 5 years GAP always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of GAP (7.32%) is better than 79.51% of its industry peers.
GAP's Return On Equity of 25.90% is amongst the best of the industry. GAP outperforms 83.61% of its industry peers.
The Return On Invested Capital of GAP (10.73%) is better than 75.41% 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
GAP's Profit Margin of 5.86% 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.
With a decent Operating Margin value of 7.69%, GAP is doing good in the industry, outperforming 76.23% of the companies in the same industry.
GAP's Operating Margin has improved in the last couple of years.
GAP has a better Gross Margin (41.09%) than 63.11% of its industry peers.
In the last couple of years the Gross Margin of GAP has grown nicely.
| 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
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
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
An Altman-Z score of 2.77 indicates that GAP is not a great score, but indicates only limited risk for bankruptcy at the moment.
GAP has a Altman-Z score of 2.77. This is in the better half of the industry: GAP outperforms 63.93% of its industry peers.
GAP has a debt to FCF ratio of 1.94. This is a very positive value and a sign of high solvency as it would only need 1.94 years to pay back of all of its debts.
The Debt to FCF ratio of GAP (1.94) is better than 76.23% 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 55.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 1.94 | ||
| Altman-Z | 2.77 |
ROIC/WACC1.19
WACC9.03%
2.3 Liquidity
A Current Ratio of 1.68 indicates that GAP should not have too much problems paying its short term obligations.
The Current ratio of GAP (1.68) is better than 72.13% of its industry peers.
A Quick Ratio of 0.96 indicates that GAP may have some problems paying its short term obligations.
GAP has a better Quick ratio (0.96) than 72.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.68 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
GAP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.27%, which is quite good.
The Earnings Per Share has been growing slightly by 2.22% on average over the past years.
GAP shows a decrease in Revenue. In the last year, the revenue decreased by -0.05%.
Measured over the past years, GAP shows a decrease in Revenue. The Revenue has been decreasing by -1.64% on average per year.
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
The Earnings Per Share is expected to grow by 5.43% on average over the next years.
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 3Y3.51%
EPS Next 5Y5.43%
Revenue Next Year1.96%
Revenue Next 2Y2.01%
Revenue Next 3Y1.88%
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.
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
A Price/Earnings ratio of 10.16 indicates a reasonable valuation of GAP.
Based on the Price/Earnings ratio, GAP is valued cheaper than 82.79% of the companies in the same industry.
GAP's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.56.
Based on the Price/Forward Earnings ratio of 10.81, the valuation of GAP can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GAP indicates a somewhat cheap valuation: GAP is cheaper than 75.41% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 34.62, GAP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.16 | ||
| Fwd PE | 10.81 |
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 88.52% 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 83.61% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.47 | ||
| EV/EBITDA | 4.59 |
4.3 Compensation for Growth
The decent profitability rating of GAP may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)4.57
EPS Next 2Y-0.24%
EPS Next 3Y3.51%
5. Dividend
5.1 Amount
GAP has a Yearly Dividend Yield of 2.72%.
Compared to an average industry Dividend Yield of 5.49, GAP pays a better dividend. On top of this GAP pays more dividend than 86.07% of the companies listed in the same industry.
GAP's Dividend Yield is comparable with the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.72% |
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 26.55% of its income as dividend. This is a sustainable payout ratio.
DP26.55%
EPS Next 2Y-0.24%
EPS Next 3Y3.51%
23.77
-0.38 (-1.57%)
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 Cap8.82B
Revenue(TTM)15.17B
Net Income(TTM)889.00M
Analysts73.33
Price Target24.78 (4.25%)
Short Float %9.83%
Short Ratio2.5
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.72% |
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)1.28%
PT rev (3m)-6.59%
EPS NQ rev (1m)0.54%
EPS NQ rev (3m)-11.4%
EPS NY rev (1m)0.2%
EPS NY rev (3m)-5.41%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)-0.2%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.16 | ||
| Fwd PE | 10.81 | ||
| P/S | 0.58 | ||
| P/FCF | 11.47 | ||
| P/OCF | 7.26 | ||
| P/B | 2.57 | ||
| P/tB | 2.57 | ||
| EV/EBITDA | 4.59 |
EPS(TTM)2.34
EY9.84%
EPS(NY)2.2
Fwd EY9.25%
FCF(TTM)2.07
FCFY8.72%
OCF(TTM)3.27
OCFY13.78%
SpS40.87
BVpS9.25
TBVpS9.25
PEG (NY)N/A
PEG (5Y)4.57
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 | 2.77 |
F-Score8
WACC9.03%
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 3Y3.51%
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 2Y2.01%
Revenue Next 3Y1.88%
Revenue Next 5Y1.59%
EBIT growth 1Y19.57%
EBIT growth 3Y8.23%
EBIT growth 5Y3.64%
EBIT Next Year51.05%
EBIT Next 3Y18.26%
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%.