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GAP INC/THE (GAP) Stock Fundamental Analysis

NYSE:GAP - New York Stock Exchange, Inc. - US3647601083 - Common Stock - Currency: USD

22.67  +0.01 (+0.04%)

After market: 22.67 0 (0%)

Fundamental Rating

5

Overall GAP gets a fundamental rating of 5 out of 10. We evaluated GAP against 121 industry peers in the Specialty Retail industry. While GAP has a great profitability rating, there are some minor concerns on its financial health. GAP may be a bit undervalued, certainly considering the very reasonable score on growth


Dividend Valuation Growth Profitability Health

7

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.
Each year in the past 5 years GAP had a positive operating cash flow.
GAP Yearly Net Income VS EBIT VS OCF VS FCFGAP Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 500M -500M 1B 1.5B 2B

1.2 Ratios

Looking at the Return On Assets, with a value of 7.60%, GAP is in the better half of the industry, outperforming 79.34% of the companies in the same industry.
GAP has a better Return On Equity (26.47%) than 83.47% of its industry peers.
The Return On Invested Capital of GAP (11.03%) is better than 77.69% of its industry peers.
Industry RankSector Rank
ROA 7.6%
ROE 26.47%
ROIC 11.03%
ROA(3y)3.29%
ROA(5y)1.41%
ROE(3y)12.05%
ROE(5y)4.02%
ROIC(3y)N/A
ROIC(5y)N/A
GAP Yearly ROA, ROE, ROICGAP Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 20 -20 40

1.3 Margins

With an excellent Profit Margin value of 5.80%, GAP belongs to the best of the industry, outperforming 80.99% of the companies in the same industry.
GAP's Profit Margin has improved in the last couple of years.
The Operating Margin of GAP (7.70%) is better than 78.51% of its industry peers.
GAP's Operating Margin has improved in the last couple of years.
GAP's Gross Margin of 41.41% is fine compared to the rest of the industry. GAP outperforms 63.64% of its industry peers.
GAP's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 7.7%
PM (TTM) 5.8%
GM 41.41%
OM growth 3Y11.89%
OM growth 5Y5.36%
PM growth 3Y53.87%
PM growth 5Y21.16%
GM growth 3Y1.21%
GM growth 5Y1.97%
GAP Yearly Profit, Operating, Gross MarginsGAP Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 10 20 30 40

4

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.
GAP has more shares outstanding than it did 1 year ago.
The number of shares outstanding for GAP has been increased compared to 5 years ago.
GAP has a better debt/assets ratio than last year.
GAP Yearly Shares OutstandingGAP Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 100M 200M 300M 400M
GAP Yearly Total Debt VS Total AssetsGAP Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B 8B 10B

2.2 Solvency

The Debt to FCF ratio of GAP is 1.70, which is an excellent value as it means it would take GAP, only 1.70 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.70, 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 0.45. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of GAP (0.45) is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.45
Debt/FCF 1.7
Altman-Z N/A
ROIC/WACC1.2
WACC9.21%
GAP Yearly LT Debt VS Equity VS FCFGAP Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 1B 2B 3B

2.3 Liquidity

A Current Ratio of 1.71 indicates that GAP should not have too much problems paying its short term obligations.
GAP has a better Current ratio (1.71) than 74.38% of its industry peers.
GAP has a Quick Ratio of 1.71. This is a bad value and indicates that GAP is not financially healthy enough and could expect problems in meeting its short term obligations.
GAP's Quick ratio of 0.98 is fine compared to the rest of the industry. GAP outperforms 77.69% of its industry peers.
Industry RankSector Rank
Current Ratio 1.71
Quick Ratio 0.98
GAP Yearly Current Assets VS Current LiabilitesGAP Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B

4

3. Growth

3.1 Past

GAP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.23%, which is quite impressive.
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 small growth in Revenue. The Revenue has grown by 1.07% in the last year.
The Revenue has been decreasing by -1.64% on average over the past years.
EPS 1Y (TTM)26.23%
EPS 3Y15.62%
EPS 5Y2.22%
EPS Q2Q%24.39%
Revenue 1Y (TTM)1.07%
Revenue growth 3Y-3.27%
Revenue growth 5Y-1.64%
Sales Q2Q%2.21%

3.2 Future

GAP is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.09% yearly.
The Revenue is expected to grow by 1.79% on average over the next years.
EPS Next Y0.57%
EPS Next 2Y3.64%
EPS Next 3Y5.56%
EPS Next 5Y6.09%
Revenue Next Year2.04%
Revenue Next 2Y2%
Revenue Next 3Y1.9%
Revenue Next 5Y1.79%

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.
GAP Yearly Revenue VS EstimatesGAP Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 5B 10B 15B
GAP Yearly EPS VS EstimatesGAP Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 0 2 -2

7

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 9.81, which indicates a very decent valuation of GAP.
Based on the Price/Earnings ratio, GAP is valued cheaper than 85.95% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.30, GAP is valued rather cheaply.
GAP is valuated reasonably with a Price/Forward Earnings ratio of 9.55.
82.64% 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 21.76, GAP is valued rather cheaply.
Industry RankSector Rank
PE 9.81
Fwd PE 9.55
GAP Price Earnings VS Forward Price EarningsGAP Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, GAP is valued cheaper than 85.95% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, GAP is valued cheaper than 85.12% of the companies in the same industry.
Industry RankSector Rank
P/FCF 9.71
EV/EBITDA 4.54
GAP Per share dataGAP EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates GAP does not grow enough to justify the current Price/Earnings ratio.
GAP has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)17.11
PEG (5Y)4.42
EPS Next 2Y3.64%
EPS Next 3Y5.56%

5

5. Dividend

5.1 Amount

GAP has a Yearly Dividend Yield of 2.90%.
Compared to an average industry Dividend Yield of 4.99, GAP pays a better dividend. On top of this GAP pays more dividend than 90.08% of the companies listed in the same industry.
GAP's Dividend Yield is a higher than the S&P500 average which is at 2.37.
Industry RankSector Rank
Dividend Yield 2.9%

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
GAP Yearly Dividends per shareGAP Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.2 0.4 0.6 0.8 1

5.3 Sustainability

26.17% of the earnings are spent on dividend by GAP. This is a low number and sustainable payout ratio.
DP26.17%
EPS Next 2Y3.64%
EPS Next 3Y5.56%
GAP Yearly Income VS Free CF VS DividendGAP Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 500M -500M 1B
GAP Dividend Payout.GAP Dividend Payout, showing the Payout Ratio.GAP Dividend Payout.PayoutRetained Earnings

GAP INC/THE

NYSE:GAP (7/8/2025, 8:04:01 PM)

After market: 22.67 0 (0%)

22.67

+0.01 (+0.04%)

Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)05-29 2025-05-29/amc
Earnings (Next)08-27 2025-08-27
Inst Owners64.38%
Inst Owner ChangeN/A
Ins Owners39.16%
Ins Owner Change40.15%
Market Cap8.54B
Analysts72.5
Price Target26.85 (18.44%)
Short Float %6.29%
Short Ratio1.37
Dividend
Industry RankSector Rank
Dividend Yield 2.9%
Yearly Dividend0.6
Dividend Growth(5Y)-9.1%
DP26.17%
Div Incr Years0
Div Non Decr Years4
Ex-Date07-09 2025-07-09 (0.165)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)27.94%
Min EPS beat(2)11.43%
Max EPS beat(2)44.45%
EPS beat(4)4
Avg EPS beat(4)28.02%
Min EPS beat(4)11.43%
Max EPS beat(4)44.45%
EPS beat(8)8
Avg EPS beat(8)109.32%
EPS beat(12)11
Avg EPS beat(12)10218.5%
EPS beat(16)13
Avg EPS beat(16)7654.76%
Revenue beat(2)2
Avg Revenue beat(2)0.54%
Min Revenue beat(2)0.23%
Max Revenue beat(2)0.85%
Revenue beat(4)3
Avg Revenue beat(4)0.5%
Min Revenue beat(4)-0.55%
Max Revenue beat(4)1.47%
Revenue beat(8)6
Avg Revenue beat(8)0.86%
Revenue beat(12)7
Avg Revenue beat(12)0.59%
Revenue beat(16)8
Avg Revenue beat(16)-0.29%
PT rev (1m)-2.79%
PT rev (3m)-6.44%
EPS NQ rev (1m)0.14%
EPS NQ rev (3m)-4.39%
EPS NY rev (1m)-2.65%
EPS NY rev (3m)-7.97%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)-0.11%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.13%
Valuation
Industry RankSector Rank
PE 9.81
Fwd PE 9.55
P/S 0.56
P/FCF 9.71
P/OCF 6.49
P/B 2.57
P/tB 2.57
EV/EBITDA 4.54
EPS(TTM)2.31
EY10.19%
EPS(NY)2.37
Fwd EY10.47%
FCF(TTM)2.33
FCFY10.3%
OCF(TTM)3.49
OCFY15.41%
SpS40.26
BVpS8.82
TBVpS8.82
PEG (NY)17.11
PEG (5Y)4.42
Profitability
Industry RankSector Rank
ROA 7.6%
ROE 26.47%
ROCE 13.41%
ROIC 11.03%
ROICexc 14.8%
ROICexgc 14.8%
OM 7.7%
PM (TTM) 5.8%
GM 41.41%
FCFM 5.8%
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
ROICexcg growth 3Y18.13%
ROICexcg 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 Turnover1.31
Health
Industry RankSector Rank
Debt/Equity 0.45
Debt/FCF 1.7
Debt/EBITDA 0.89
Cap/Depr 87.93%
Cap/Sales 2.88%
Interest Coverage 250
Cash Conversion 79.04%
Profit Quality 100%
Current Ratio 1.71
Quick Ratio 0.98
Altman-Z N/A
F-Score8
WACC9.21%
ROIC/WACC1.2
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)26.23%
EPS 3Y15.62%
EPS 5Y2.22%
EPS Q2Q%24.39%
EPS Next Y0.57%
EPS Next 2Y3.64%
EPS Next 3Y5.56%
EPS Next 5Y6.09%
Revenue 1Y (TTM)1.07%
Revenue growth 3Y-3.27%
Revenue growth 5Y-1.64%
Sales Q2Q%2.21%
Revenue Next Year2.04%
Revenue Next 2Y2%
Revenue Next 3Y1.9%
Revenue Next 5Y1.79%
EBIT growth 1Y39.55%
EBIT growth 3Y8.23%
EBIT growth 5Y3.64%
EBIT Next Year60.17%
EBIT Next 3Y19.21%
EBIT Next 5Y10.69%
FCF growth 1Y114.39%
FCF growth 3Y108.28%
FCF growth 5Y23.2%
OCF growth 1Y33.74%
OCF growth 3Y22.47%
OCF growth 5Y1.04%