GAP INC/THE (GAP) Stock Fundamental Analysis
NYSE:GAP - New York Stock Exchange, Inc. - US3647601083 - Common Stock - Currency: USD
Taking everything into account, GAP scores 5 out of 10 in our fundamental rating. GAP was compared to 120 industry peers in the Specialty Retail industry. GAP has only an average score on both its financial health and profitability. GAP is valued quite cheap, while showing a decent growth score. This is a good combination! With these ratings, GAP could be worth investigating further 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.
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 6.94%. This is in the better half of the industry: GAP outperforms 76.07% of its industry peers.
The Return On Equity of GAP (26.25%) is better than 80.34% of its industry peers.
The Return On Invested Capital of GAP (11.44%) is better than 76.92% of its industry peers.
| 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
GAP has a better Profit Margin (5.40%) than 78.63% of its industry peers.
GAP's Profit Margin has declined in the last couple of years.
GAP has a Operating Margin of 7.10%. This is in the better half of the industry: GAP outperforms 76.07% of its industry peers.
In the last couple of years the Operating Margin of GAP has declined.
GAP's Gross Margin of 41.27% is fine compared to the rest of the industry. GAP outperforms 62.39% of its industry peers.
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so GAP is still creating some value.
The number of shares outstanding for GAP has been increased compared to 1 year ago.
Compared to 5 years ago, GAP has less shares outstanding
GAP has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.69 indicates that GAP is not a great score, but indicates only limited risk for bankruptcy at the moment.
GAP has a Altman-Z score of 2.69. This is comparable to the rest of the industry: GAP outperforms 57.27% of its industry peers.
The Debt to FCF ratio of GAP is 1.34, which is an excellent value as it means it would take GAP, only 1.34 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.34, GAP is doing good in the industry, outperforming 77.78% of the companies in the same industry.
A Debt/Equity ratio of 0.47 indicates that GAP is not too dependend on debt financing.
The Debt to Equity ratio of GAP (0.47) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 1.34 | ||
| Altman-Z | 2.69 |
ROIC/WACC1.13
WACC10.17%
2.3 Liquidity
A Current Ratio of 1.54 indicates that GAP should not have too much problems paying its short term obligations.
GAP's Current ratio of 1.54 is fine compared to the rest of the industry. GAP outperforms 61.54% of its industry peers.
A Quick Ratio of 0.84 indicates that GAP may have some problems paying its short term obligations.
GAP has a Quick ratio of 0.84. This is in the better half of the industry: GAP outperforms 68.38% of its industry peers.
| 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.
The Revenue has been growing slightly by 2.70% in the past year.
The Revenue has been decreasing by -2.13% on average over the past years.
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
The Earnings Per Share is expected to grow by 15.10% on average over the next years. This is quite good.
GAP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.83% yearly.
EPS Next Y43.44%
EPS Next 2Y23.54%
EPS Next 3Y19.39%
EPS Next 5Y15.1%
Revenue Next Year1.38%
Revenue Next 2Y1.53%
Revenue Next 3Y1.93%
Revenue Next 5Y1.83%
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
Based on the Price/Earnings ratio of 10.29, the valuation of GAP can be described as reasonable.
Based on the Price/Earnings ratio, GAP is valued cheaper than 89.74% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.63, GAP is valued rather cheaply.
The Price/Forward Earnings ratio is 10.19, which indicates a very decent valuation of GAP.
83.76% 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 22.68, GAP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.29 | ||
| Fwd PE | 10.19 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GAP is valued cheaply inside the industry as 90.60% of the companies are valued more expensively.
92.31% 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 | 7.57 | ||
| EV/EBITDA | 4.73 |
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.
A more expensive valuation may be justified as GAP's earnings are expected to grow with 19.39% in the coming years.
PEG (NY)0.24
PEG (5Y)N/A
EPS Next 2Y23.54%
EPS Next 3Y19.39%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.60%, GAP has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.01, GAP pays a better dividend. On top of this GAP pays more dividend than 86.32% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, GAP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.6% |
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
27.34% of the earnings are spent on dividend by GAP. This is a low number and sustainable payout ratio.
DP27.34%
EPS Next 2Y23.54%
EPS Next 3Y19.39%
22.23
-0.17 (-0.76%)
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 Change0.22%
Market Cap8.38B
Analysts74.78
Price Target29.96 (34.77%)
Short Float %12.15%
Short Ratio5.94
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.6% |
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)2.48%
PT rev (3m)8.15%
EPS NQ rev (1m)0.53%
EPS NQ rev (3m)8.16%
EPS NY rev (1m)0.12%
EPS NY rev (3m)16.16%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.29%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)0.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.29 | ||
| Fwd PE | 10.19 | ||
| P/S | 0.55 | ||
| P/FCF | 7.57 | ||
| P/OCF | 5.34 | ||
| P/B | 2.67 | ||
| P/tB | 2.67 | ||
| EV/EBITDA | 4.73 |
EPS(TTM)2.16
EY9.72%
EPS(NY)2.18
Fwd EY9.82%
FCF(TTM)2.94
FCFY13.22%
OCF(TTM)4.16
OCFY18.73%
SpS40.4
BVpS8.31
TBVpS8.31
PEG (NY)0.24
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 | 2.69 |
F-Score7
WACC10.17%
ROIC/WACC1.13
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 Y43.44%
EPS Next 2Y23.54%
EPS Next 3Y19.39%
EPS Next 5Y15.1%
Revenue 1Y (TTM)2.7%
Revenue growth 3Y2.56%
Revenue growth 5Y-2.13%
Sales Q2Q%1.65%
Revenue Next Year1.38%
Revenue Next 2Y1.53%
Revenue Next 3Y1.93%
Revenue Next 5Y1.83%
EBIT growth 1Y175.77%
EBIT growth 3YN/A
EBIT growth 5Y-15.33%
EBIT Next Year209.75%
EBIT Next 3Y51.44%
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%