GAP INC/THE (GAP) Stock Fundamental Analysis
NYSE:GAP - New York Stock Exchange, Inc. - US3647601083 - Common Stock
We assign a fundamental rating of 6 out of 10 to GAP. GAP was compared to 119 industry peers in the Specialty Retail industry. GAP has only an average score on both its financial health and profitability. GAP may be a bit undervalued, certainly considering the very reasonable score on growth These ratings could make GAP a good candidate 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.
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
GAP's Return On Assets of 6.94% is fine compared to the rest of the industry. GAP outperforms 75.86% of its industry peers.
The Return On Equity of GAP (26.25%) is better than 81.03% of its industry peers.
Looking at the Return On Invested Capital, with a value of 11.44%, GAP is in the better half of the industry, outperforming 76.72% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.94% | ||
| ROE | 26.25% | ||
| ROIC | 11.44% |
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
Looking at the Profit Margin, with a value of 5.40%, GAP is in the better half of the industry, outperforming 78.45% of the companies in the same industry.
GAP's Profit Margin has declined in the last couple of years.
GAP has a better Operating Margin (7.10%) than 75.86% of its industry peers.
In the last couple of years the Operating Margin of GAP has declined.
Looking at the Gross Margin, with a value of 41.27%, GAP is in the better half of the industry, outperforming 62.93% of the companies in the same industry.
GAP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.1% | ||
| PM (TTM) | 5.4% | ||
| GM | 41.27% |
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
GAP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for GAP has been increased compared to 1 year ago.
The number of shares outstanding for GAP has been reduced compared to 5 years ago.
The debt/assets ratio for GAP has been reduced compared to a year ago.
2.2 Solvency
GAP has an Altman-Z score of 2.76. 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.
The Altman-Z score of GAP (2.76) is better than 61.21% of its industry peers.
GAP has a debt to FCF ratio of 1.34. This is a very positive value and a sign of high solvency as it would only need 1.34 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.34, GAP belongs to the top of the industry, outperforming 80.17% of the companies in the same industry.
GAP has a Debt/Equity ratio of 0.47. This is a healthy value indicating a solid balance between debt and equity.
GAP has a Debt to Equity ratio (0.47) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 1.34 | ||
| Altman-Z | 2.76 |
ROIC/WACC1.14
WACC10.06%
2.3 Liquidity
A Current Ratio of 1.54 indicates that GAP should not have too much problems paying its short term obligations.
GAP has a better Current ratio (1.54) than 62.07% of its industry peers.
A Quick Ratio of 0.84 indicates that GAP may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.84, GAP is in the better half of the industry, outperforming 69.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.54 | ||
| Quick Ratio | 0.84 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 1036.84% over the past year.
GAP shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -11.20% yearly.
GAP shows a small growth in Revenue. In the last year, the Revenue has grown by 2.70%.
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)1036.84%
EPS 3YN/A
EPS 5Y-11.2%
EPS Q2Q%22.03%
Revenue 1Y (TTM)2.7%
Revenue growth 3Y2.56%
Revenue growth 5Y-2.13%
Sales Q2Q%1.65%
3.2 Future
Based on estimates for the next years, GAP will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.10% on average per year.
GAP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.83% yearly.
EPS Next Y43.27%
EPS Next 2Y23.13%
EPS Next 3Y17.89%
EPS Next 5Y15.1%
Revenue Next Year1.32%
Revenue Next 2Y1.49%
Revenue Next 3Y1.86%
Revenue Next 5Y1.83%
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
With a Price/Earnings ratio of 11.53, the valuation of GAP can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of GAP indicates a rather cheap valuation: GAP is cheaper than 86.21% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.29. GAP is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 11.48 indicates a reasonable valuation of GAP.
78.45% of the companies in the same industry are more expensive than GAP, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 24.44. GAP is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.53 | ||
| Fwd PE | 11.48 |
4.2 Price Multiples
GAP's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. GAP is cheaper than 89.66% of the companies in the same industry.
GAP's Price/Free Cash Flow ratio is rather cheap when compared to the industry. GAP is cheaper than 91.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.47 | ||
| EV/EBITDA | 5.32 |
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 17.89% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.27
PEG (5Y)N/A
EPS Next 2Y23.13%
EPS Next 3Y17.89%
5. Dividend
5.1 Amount
GAP has a Yearly Dividend Yield of 2.64%. 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 3.27. GAP pays more dividend than 88.79% of the companies in the same industry.
GAP's Dividend Yield is comparable with the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.64% |
5.2 History
The dividend of GAP decreases each year by -9.16%.
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)-9.16%
Div Incr Years3
Div Non Decr Years4
5.3 Sustainability
GAP pays out 27.34% of its income as dividend. This is a sustainable payout ratio.
DP27.34%
EPS Next 2Y23.13%
EPS Next 3Y17.89%
GAP INC/THE
NYSE:GAP (1/21/2025, 8:04:01 PM)
After market: 24.83 -0.07 (-0.28%)24.9
+1.44 (+6.14%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners64.55%
Inst Owner ChangeN/A
Ins Owners40.58%
Ins Owner Change1.02%
Market Cap9.39B
Analysts71.67
Price Target29.24 (17.43%)
Short Float %13.51%
Short Ratio4.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.64% |
Yearly Dividend0.6
Dividend Growth(5Y)-9.16%
DP27.34%
Div Incr Years3
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)28.1%
Min EPS beat(2)23.43%
Max EPS beat(2)32.76%
EPS beat(4)4
Avg EPS beat(4)89.88%
Min EPS beat(4)23.43%
Max EPS beat(4)188.17%
EPS beat(8)7
Avg EPS beat(8)108.03%
EPS beat(12)10
Avg EPS beat(12)10201.3%
EPS beat(16)13
Avg EPS beat(16)7718.13%
Revenue beat(2)1
Avg Revenue beat(2)0.46%
Min Revenue beat(2)-0.55%
Max Revenue beat(2)1.47%
Revenue beat(4)3
Avg Revenue beat(4)0.99%
Min Revenue beat(4)-0.55%
Max Revenue beat(4)2.08%
Revenue beat(8)4
Avg Revenue beat(8)0.11%
Revenue beat(12)5
Avg Revenue beat(12)0.46%
Revenue beat(16)7
Avg Revenue beat(16)0.19%
PT rev (1m)2%
PT rev (3m)5.53%
EPS NQ rev (1m)0%
EPS NQ rev (3m)7.59%
EPS NY rev (1m)0%
EPS NY rev (3m)16.03%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.29%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.53 | ||
| Fwd PE | 11.48 | ||
| P/S | 0.62 | ||
| P/FCF | 8.47 | ||
| P/OCF | 5.98 | ||
| P/B | 3 | ||
| P/tB | 3 | ||
| EV/EBITDA | 5.32 |
EPS(TTM)2.16
EY8.67%
EPS(NY)2.17
Fwd EY8.71%
FCF(TTM)2.94
FCFY11.8%
OCF(TTM)4.16
OCFY16.72%
SpS40.4
BVpS8.31
TBVpS8.31
PEG (NY)0.27
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.94% | ||
| ROE | 26.25% | ||
| ROCE | 12.68% | ||
| ROIC | 11.44% | ||
| ROICexc | 15.47% | ||
| ROICexgc | 15.47% | ||
| OM | 7.1% | ||
| PM (TTM) | 5.4% | ||
| GM | 41.27% | ||
| FCFM | 7.27% |
ROA(3y)1.59%
ROA(5y)0.5%
ROE(3y)6.57%
ROE(5y)0.97%
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
ROICexcg growth 3YN/A
ROICexcg growth 5Y-24.57%
ROICexc growth 3YN/A
ROICexc growth 5Y-24.42%
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%
F-Score7
Asset Turnover1.29
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 1.34 | ||
| Debt/EBITDA | 0.94 | ||
| Cap/Depr | 92.59% | ||
| Cap/Sales | 3.03% | ||
| Interest Coverage | 17.16 | ||
| Cash Conversion | 99.37% | ||
| Profit Quality | 134.63% | ||
| Current Ratio | 1.54 | ||
| Quick Ratio | 0.84 | ||
| Altman-Z | 2.76 |
F-Score7
WACC10.06%
ROIC/WACC1.14
Cap/Depr(3y)115%
Cap/Depr(5y)121.99%
Cap/Sales(3y)3.79%
Cap/Sales(5y)4.12%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)1036.84%
EPS 3YN/A
EPS 5Y-11.2%
EPS Q2Q%22.03%
EPS Next Y43.27%
EPS Next 2Y23.13%
EPS Next 3Y17.89%
EPS Next 5Y15.1%
Revenue 1Y (TTM)2.7%
Revenue growth 3Y2.56%
Revenue growth 5Y-2.13%
Sales Q2Q%1.65%
Revenue Next Year1.32%
Revenue Next 2Y1.49%
Revenue Next 3Y1.86%
Revenue Next 5Y1.83%
EBIT growth 1Y175.77%
EBIT growth 3YN/A
EBIT growth 5Y-15.33%
EBIT Next Year209.75%
EBIT Next 3Y51.58%
EBIT Next 5Y28.25%
FCF growth 1Y243.9%
FCF growth 3YN/A
FCF growth 5Y10.47%
OCF growth 1Y10366.7%
OCF growth 3Y86.28%
OCF growth 5Y2.1%