GAP INC/THE (GAP) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:GAP - US3647601083 - Common Stock
26.335 USD
-0.52 (-1.92%)
We assign a fundamental rating of 6 out of 10 to GAP. GAP was compared to 122 industry peers in the Specialty Retail industry. GAP scores excellent on profitability, but there are some minor concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on GAP. These ratings would make GAP suitable 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.
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
GAP has a Return On Assets of 6.88%. This is in the better half of the industry: GAP outperforms 79.51% of its industry peers.
With an excellent Return On Equity value of 23.33%, GAP belongs to the best of the industry, outperforming 83.61% of the companies in the same industry.
GAP has a better Return On Invested Capital (10.37%) than 77.05% of its industry peers.
| 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
With a decent Profit Margin value of 5.57%, GAP is doing good in the industry, outperforming 79.51% of the companies in the same industry.
GAP's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 7.50%, GAP is doing good in the industry, outperforming 76.23% of the companies in the same industry.
In the last couple of years the Operating Margin of GAP has grown nicely.
GAP has a Gross Margin of 41.01%. This is in the better half of the industry: GAP outperforms 63.93% of its industry peers.
In the last couple of years the Gross Margin of GAP has grown nicely.
| 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
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.
The debt/assets ratio for GAP has been reduced compared to a year ago.
2.2 Solvency
GAP has an Altman-Z score of 2.85. 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.
GAP's Altman-Z score of 2.85 is fine compared to the rest of the industry. GAP outperforms 68.03% of its industry peers.
GAP has a debt to FCF ratio of 1.91. This is a very positive value and a sign of high solvency as it would only need 1.91 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.91, GAP is in the better half of the industry, outperforming 76.23% of the companies in the same industry.
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 (0.41) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 1.91 | ||
| Altman-Z | 2.85 |
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.
With a decent Current ratio value of 1.72, GAP is doing good in the industry, outperforming 74.59% of the companies in the same industry.
GAP has a Quick Ratio of 1.72. 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 0.97 is fine compared to the rest of the industry. GAP outperforms 74.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.72 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
GAP shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.70%.
GAP shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.22% yearly.
GAP shows a small growth in Revenue. In the last year, the Revenue has grown by 0.29%.
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)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.
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 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
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
GAP is valuated reasonably with a Price/Earnings ratio of 11.76.
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.
Compared to an average S&P500 Price/Earnings ratio of 26.37, GAP is valued rather cheaply.
With a Price/Forward Earnings ratio of 11.97, the valuation of GAP can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GAP indicates a somewhat cheap valuation: GAP is cheaper than 77.87% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.20, GAP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.76 | ||
| Fwd PE | 11.97 |
4.2 Price Multiples
GAP's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. GAP is cheaper than 85.25% of the companies in the same industry.
83.61% of the companies in the same industry are more expensive than GAP, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.54 | ||
| EV/EBITDA | 5.28 |
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)5.29
EPS Next 2Y-0.24%
EPS Next 3Y5.3%
5. Dividend
5.1 Amount
GAP has a Yearly Dividend Yield of 2.40%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 5.65, GAP pays a better dividend. On top of this GAP pays more dividend than 83.61% of the companies listed in the same industry.
GAP's Dividend Yield is comparable with the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.4% |
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
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%
NYSE:GAP (12/4/2025, 2:07:08 PM)
26.335
-0.52 (-1.92%)
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 Change0.11%
Market Cap9.77B
Revenue(TTM)15.28B
Net Income(TTM)851.00M
Analysts73.33
Price Target25.56 (-2.94%)
Short Float %9.33%
Short Ratio2.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.4% |
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)5.68%
EPS NQ rev (3m)9%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.95%
Revenue NQ rev (1m)0.42%
Revenue NQ rev (3m)0.26%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.76 | ||
| Fwd PE | 11.97 | ||
| P/S | 0.64 | ||
| P/FCF | 12.54 | ||
| P/OCF | 7.99 | ||
| P/B | 2.68 | ||
| P/tB | 2.68 | ||
| EV/EBITDA | 5.28 |
EPS(TTM)2.24
EY8.51%
EPS(NY)2.2
Fwd EY8.35%
FCF(TTM)2.1
FCFY7.97%
OCF(TTM)3.3
OCFY12.52%
SpS41.18
BVpS9.83
TBVpS9.83
PEG (NY)N/A
PEG (5Y)5.29
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 | 18.19 | ||
| Cash Conversion | 74.44% | ||
| Profit Quality | 91.54% | ||
| Current Ratio | 1.72 | ||
| Quick Ratio | 0.97 | ||
| Altman-Z | 2.85 |
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 6 / 10 to GAP.
What is the valuation status of GAP INC/THE (GAP) stock?
ChartMill assigns a valuation rating of 6 / 10 to GAP INC/THE (GAP). This can be considered as Fairly Valued.
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 28.32%.