GAP INC/THE (GAP)
US3647601083 - Common Stock
Overall GAP gets a fundamental rating of 5 out of 10. We evaluated GAP against 123 industry peers in the Specialty Retail industry. Both the profitability and the financial health of GAP get a neutral evaluation. Nothing too spectacular is happening here. GAP is valued quite cheap, while showing a decent growth score. This is a good combination! This makes GAP very considerable 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.
Each year in the past 5 years GAP had a positive operating cash flow.
1.2 Ratios
GAP has a better Return On Assets (6.22%) than 72.13% of its industry peers.
GAP has a better Return On Equity (25.05%) than 78.69% of its industry peers.
GAP's Return On Invested Capital of 9.33% is fine compared to the rest of the industry. GAP outperforms 73.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.22% | ||
| ROE | 25.05% | ||
| ROIC | 9.33% |
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 4.52%, GAP is in the better half of the industry, outperforming 73.77% of the companies in the same industry.
In the last couple of years the Profit Margin of GAP has declined.
GAP's Operating Margin of 5.58% is fine compared to the rest of the industry. GAP outperforms 69.67% of its industry peers.
GAP's Operating Margin has declined in the last couple of years.
GAP has a Gross Margin (39.72%) which is in line with its industry peers.
GAP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.58% | ||
| PM (TTM) | 4.52% | ||
| GM | 39.72% |
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
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 reduced 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 2.66 indicates that GAP is not a great score, but indicates only limited risk for bankruptcy at the moment.
GAP's Altman-Z score of 2.66 is in line compared to the rest of the industry. GAP outperforms 56.56% of its industry peers.
The Debt to FCF ratio of GAP is 1.29, which is an excellent value as it means it would take GAP, only 1.29 years of fcf income to pay off all of its debts.
GAP has a better Debt to FCF ratio (1.29) than 77.05% of its industry peers.
A Debt/Equity ratio of 0.55 indicates that GAP is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.55, GAP is in line with its industry, outperforming 48.36% of the companies in the same industry.
Although GAP does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 1.29 | ||
| Altman-Z | 2.66 |
ROIC/WACC1.09
WACC8.53%
2.3 Liquidity
A Current Ratio of 1.50 indicates that GAP should not have too much problems paying its short term obligations.
The Current ratio of GAP (1.50) is comparable to the rest of the industry.
A Quick Ratio of 0.80 indicates that GAP may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.80, GAP is in the better half of the industry, outperforming 67.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.5 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 1116.67% over the past year.
The earnings per share for GAP have been decreasing by -11.20% on average. This is quite bad
GAP shows a decrease in Revenue. In the last year, the revenue decreased by -2.69%.
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)1116.67%
EPS 3YN/A
EPS 5Y-11.2%
EPS Q2Q%4000%
Revenue 1Y (TTM)-2.69%
Revenue growth 3Y2.56%
Revenue growth 5Y-2.13%
Sales Q2Q%3.42%
3.2 Future
The Earnings Per Share is expected to grow by 14.94% on average over the next years. This is quite good.
The Revenue is expected to grow by 1.47% on average over the next years.
EPS Next Y23.48%
EPS Next 2Y16.71%
EPS Next 3Y15.47%
EPS Next 5Y14.94%
Revenue Next Year0.74%
Revenue Next 2Y1.3%
Revenue Next 3Y1.64%
Revenue Next 5Y1.47%
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
With a Price/Earnings ratio of 10.94, 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 80.33% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of GAP to the average of the S&P500 Index (30.57), we can say GAP is valued rather cheaply.
With a Price/Forward Earnings ratio of 10.28, the valuation of GAP can be described as very reasonable.
Based on the Price/Forward Earnings ratio, GAP is valued a bit cheaper than 77.87% 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 22.04.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.94 | ||
| Fwd PE | 10.28 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GAP is valued cheaper than 87.70% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, GAP is valued cheaply inside the industry as 93.44% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.55 | ||
| EV/EBITDA | 5.27 |
4.3 Compensation for Growth
The 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 15.47% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.47
PEG (5Y)N/A
EPS Next 2Y16.71%
EPS Next 3Y15.47%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.92%, 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 3.85. GAP pays more dividend than 87.70% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.26, GAP pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.92% |
5.2 History
The dividend of GAP decreases each year by -9.16%.
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)-9.16%
Div Incr Years3
Div Non Decr Years4
5.3 Sustainability
32.89% of the earnings are spent on dividend by GAP. This is a low number and sustainable payout ratio.
DP32.89%
EPS Next 2Y16.71%
EPS Next 3Y15.47%
GAP INC/THE
NYSE:GAP (9/17/2024, 8:08:39 PM)
After market: 20.106 +0.09 (+0.43%)20.02
-0.39 (-1.91%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap7.53B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.92% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.94 | ||
| Fwd PE | 10.28 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.47
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.22% | ||
| ROE | 25.05% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 5.58% | ||
| PM (TTM) | 4.52% | ||
| GM | 39.72% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.5 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)1116.67%
EPS 3YN/A
EPS 5Y
EPS Q2Q%
EPS Next Y23.48%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-2.69%
Revenue growth 3Y2.56%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y