GAP INC/THE (GAP) Stock Fundamental Analysis
USA - NYSE:GAP - US3647601083 - Common Stock
21.6 USD
+0.95 (+4.6%)
21.6999 USD
+0.1 (+0.46%)
GAP gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 120 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. This makes GAP very considerable for value investing!
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.
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 80.00% of its industry peers.
GAP has a better Return On Equity (25.90%) than 84.17% of its industry peers.
GAP's Return On Invested Capital of 10.73% is fine compared to the rest of the industry. GAP outperforms 75.00% 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
The Profit Margin of GAP (5.86%) is better than 79.17% of its industry peers.
GAP's Profit Margin has improved in the last couple of years.
GAP has a Operating Margin of 7.69%. This is in the better half of the industry: GAP outperforms 76.67% of its industry peers.
In the last couple of years the Operating Margin of GAP has grown nicely.
GAP's Gross Margin of 41.09% is fine compared to the rest of the industry. GAP outperforms 63.33% of its industry peers.
GAP's Gross Margin has improved in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), GAP is creating some value.
GAP has more shares outstanding than it did 1 year ago.
GAP has more shares outstanding than it did 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 2.69. 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 has a Altman-Z score of 2.69. This is in the better half of the industry: GAP outperforms 60.83% 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.
With a decent Debt to FCF ratio value of 1.94, GAP is doing good in the industry, outperforming 75.83% of the companies in the same industry.
GAP has a Debt/Equity ratio of 0.43. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.43, GAP is in line with its industry, outperforming 55.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 1.94 | ||
| Altman-Z | 2.69 |
ROIC/WACC1.17
WACC9.14%
2.3 Liquidity
A Current Ratio of 1.68 indicates that GAP should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.68, GAP is in the better half of the industry, outperforming 74.17% of the companies in the same industry.
A Quick Ratio of 0.96 indicates that GAP may have some problems paying its short term obligations.
The Quick ratio of GAP (0.96) is better than 75.00% 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.
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.
The Revenue has decreased by -0.05% in the past year.
GAP shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.64% yearly.
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
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.
Based on estimates for the next years, GAP will show a small growth in Revenue. The Revenue will grow by 1.59% on average per year.
EPS Next Y-4.95%
EPS Next 2Y-0.43%
EPS Next 3Y3.64%
EPS Next 5Y5.43%
Revenue Next Year1.94%
Revenue Next 2Y1.97%
Revenue Next 3Y1.89%
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.
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
With a Price/Earnings ratio of 9.23, the valuation of GAP can be described as very reasonable.
90.83% of the companies in the same industry are more expensive than GAP, based on the Price/Earnings ratio.
GAP is valuated cheaply when we compare the Price/Earnings ratio to 27.40, which is the current average of the S&P500 Index.
GAP is valuated reasonably with a Price/Forward Earnings ratio of 9.86.
Based on the Price/Forward Earnings ratio, GAP is valued cheaper than 87.50% of the companies in the same industry.
GAP's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.23 | ||
| Fwd PE | 9.86 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GAP is valued cheaply inside the industry as 91.67% of the companies are valued more expensively.
85.00% 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 | 10.42 | ||
| EV/EBITDA | 3.9 |
4.3 Compensation for Growth
The decent profitability rating of GAP may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)4.15
EPS Next 2Y-0.43%
EPS Next 3Y3.64%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.23%, GAP has a reasonable but not impressive dividend return.
GAP's Dividend Yield is rather good when compared to the industry average which is at 5.63. GAP pays more dividend than 89.17% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, GAP pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.23% |
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
26.55% of the earnings are spent on dividend by GAP. This is a low number and sustainable payout ratio.
DP26.55%
EPS Next 2Y-0.43%
EPS Next 3Y3.64%
21.6
+0.95 (+4.6%)
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 Change0.16%
Market Cap8.01B
Analysts72.17
Price Target24.46 (13.24%)
Short Float %10.44%
Short Ratio2.47
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.23% |
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)0.51%
PT rev (3m)-8.89%
EPS NQ rev (1m)0.31%
EPS NQ rev (3m)-14.79%
EPS NY rev (1m)-3.15%
EPS NY rev (3m)-5.6%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.13%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.23 | ||
| Fwd PE | 9.86 | ||
| P/S | 0.53 | ||
| P/FCF | 10.42 | ||
| P/OCF | 6.6 | ||
| P/B | 2.33 | ||
| P/tB | 2.33 | ||
| EV/EBITDA | 3.9 |
EPS(TTM)2.34
EY10.83%
EPS(NY)2.19
Fwd EY10.14%
FCF(TTM)2.07
FCFY9.59%
OCF(TTM)3.27
OCFY15.16%
SpS40.87
BVpS9.25
TBVpS9.25
PEG (NY)N/A
PEG (5Y)4.15
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
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 Turnover1.25
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 | 2.69 |
F-Score8
WACC9.14%
ROIC/WACC1.17
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-4.95%
EPS Next 2Y-0.43%
EPS Next 3Y3.64%
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 Year1.94%
Revenue Next 2Y1.97%
Revenue Next 3Y1.89%
Revenue Next 5Y1.59%
EBIT growth 1Y19.57%
EBIT growth 3Y8.23%
EBIT growth 5Y3.64%
EBIT Next Year51.05%
EBIT Next 3Y18.28%
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%