NYSE:GPS

Stock Analysis Report

Executive Summary

The Gap, Inc. operates as an apparel retail company worldwide.


Snowflake Analysis

6 star dividend payer with excellent balance sheet.


Similar Companies

Share Price & News

How has Gap's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GPS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-6.0%

GPS

0.9%

US Specialty Retail

-1.1%

US Market


1 Year Return

-31.1%

GPS

17.7%

US Specialty Retail

17.9%

US Market

Return vs Industry: GPS underperformed the US Specialty Retail industry which returned 17.7% over the past year.

Return vs Market: GPS underperformed the US Market which returned 17.9% over the past year.


Shareholder returns

GPSIndustryMarket
7 Day-6.0%0.9%-1.1%
30 Day-3.4%2.7%1.4%
90 Day-0.6%5.1%6.9%
1 Year-27.5%-31.1%19.5%17.7%20.3%17.9%
3 Year-22.2%-30.9%44.9%37.9%47.8%38.3%
5 Year-50.5%-59.0%48.1%36.1%71.9%53.0%

Price Volatility Vs. Market

How volatile is Gap's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Gap undervalued compared to its fair value and its price relative to the market?

5.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GPS ($17.06) is trading below our estimate of fair value ($18.04)

Significantly Below Fair Value: GPS is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: GPS is good value based on its PE Ratio (7.9x) compared to the Specialty Retail industry average (16.9x).

PE vs Market: GPS is good value based on its PE Ratio (7.9x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: GPS's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: GPS is overvalued based on its PB Ratio (1.8x) compared to the US Specialty Retail industry average (1.5x).


Next Steps

Future Growth

How is Gap forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?

-9.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GPS's earnings are forecast to decline over the next 3 years (-9.3% per year).

Earnings vs Market: GPS's earnings are forecast to decline over the next 3 years (-9.3% per year).

High Growth Earnings: GPS's earnings are forecast to decline over the next 3 years.

Revenue vs Market: GPS's revenue is expected to decline over the next 3 years (-0.1% per year).

High Growth Revenue: GPS's revenue is forecast to decline over the next 3 years (-0.1% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GPS's Return on Equity is forecast to be high in 3 years time (20.6%)


Next Steps

Past Performance

How has Gap performed over the past 5 years?

-5.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GPS has high quality earnings.

Growing Profit Margin: GPS's current net profit margins (5%) are lower than last year (5.6%).


Past Earnings Growth Analysis

Earnings Trend: GPS's earnings have declined by -5.1% per year over the past 5 years.

Accelerating Growth: GPS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: GPS had negative earnings growth (-12.9%) over the past year, making it difficult to compare to the Specialty Retail industry average (7.9%).


Return on Equity

High ROE: GPS's Return on Equity (22.3%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Gap's financial position?


Financial Position Analysis

Short Term Liabilities: GPS's short term assets ($4.6B) exceed its short term liabilities ($3.2B).

Long Term Liabilities: GPS's short term assets ($4.6B) do not cover its long term liabilities ($7.3B).


Debt to Equity History and Analysis

Debt Level: GPS's debt to equity ratio (34.4%) is considered satisfactory.

Reducing Debt: GPS's debt to equity ratio has reduced from 48.3% to 34.4% over the past 5 years.

Debt Coverage: GPS's debt is well covered by operating cash flow (107.4%).

Interest Coverage: GPS's interest payments on its debt are well covered by EBIT (30.4x coverage).


Balance Sheet

Inventory Level: GPS has a high level of physical assets or inventory.

Debt Coverage by Assets: GPS's debt is covered by short term assets (assets are 3.7x debt).


Next Steps

Dividend

What is Gap's current dividend yield, its reliability and sustainability?

5.69%

Current Dividend Yield


Dividend Yield vs Market

company5.7%marketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Years5.8%

Current dividend yield vs market & industry

Notable Dividend: GPS's dividend (5.69%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: GPS's dividend (5.69%) is in the top 25% of dividend payers in the US market (3.73%)


Stability and Growth of Payments

Stable Dividend: GPS's dividends per share have been stable in the past 10 years.

Growing Dividend: GPS's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (45.2%), GPS's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: GPS's dividends in 3 years are forecast to be covered by earnings (57% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average management tenure


CEO

Bob Fisher (64yo)

0.3yrs

Tenure

US$477,974

Compensation

Mr. Robert J. Fisher, also known as Bob, serves as Chairman, Interim President and Chief Executive Officer at The Gap, Inc. since November 7, 2019. Mr. Fisher served as the Chief Financial Officer at Gap I ...


Leadership Team

NamePositionTenureCompensationOwnership
Robert Fisher
Chairman0.3yrsUS$477.97k12.85% $818.4m
Teri List-Stoll
Executive VP & CFO3.1yrsUS$7.50m0.013% $825.4k
Mark Breitbard
President & CEO of Banana Republic2.8yrsUS$4.80m0.011% $707.5k
Sally Gilligan
Chief Information Officer2.1yrsno datano data
Tina Romani
Senior Director of Investor Relations0yrsno datano data
Julie Gruber
Executive VP4yrsno data0.0078% $496.7k
Alegra O'Hare
Chief Marketing Officer0.9yrsno datano data
Michele Nyrop
Executive VP & Chief People Officer0yrsno data0.0033% $208.9k
Nancy Green
President & Chief Creative Officer of Old Navy0yrsno datano data
Shawn Curran
Executive VP of Global Supply Chain & Product Operations2.3yrsno data0.0069% $440.1k

2.3yrs

Average Tenure

55yo

Average Age

Experienced Management: GPS's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Robert Fisher
Chairman0.3yrsUS$477.97k12.85% $818.4m
Jorge Montoya
Independent Director15.9yrsUS$275.97k0.011% $680.2k
Mayo Shattuck
Independent Director18.1yrsUS$298.97k0.027% $1.7m
Bobby Martin
Lead Independent Director0.3yrsUS$289.97k0.014% $882.0k
Isabella Goren
Independent Director8.5yrsUS$265.97k0.0062% $395.5k
Tracy Gardner
Independent Director4.3yrsUS$243.97k0.0028% $179.6k
William Fisher
Independent Director10.3yrsUS$254.97k10.35% $659.4m
John Fisher
Independent Director1.3yrsUS$179.99k14.27% $909.1m
Christopher O'Neill
Independent Director2yrsUS$317.04kno data
Lexi Reese
Independent Director1.3yrsUS$179.99kno data

4.6yrs

Average Tenure

60yo

Average Age

Experienced Board: GPS's board of directors are considered experienced (4.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

The Gap, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Gap, Inc.
  • Ticker: GPS
  • Exchange: NYSE
  • Founded: 1969
  • Industry: Apparel Retail
  • Sector: Retail
  • Market Cap: US$6.368b
  • Shares outstanding: 373.30m
  • Website: https://www.gapinc.com

Number of Employees


Location

  • The Gap, Inc.
  • 2 Folsom Street
  • San Francisco
  • California
  • 94105
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GPSNYSE (New York Stock Exchange)YesCommon StockUSUSDJul 1976
GPS *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJul 1976
GAPDB (Deutsche Boerse AG)YesCommon StockDEEURJul 1976
0ITSLSE (London Stock Exchange)YesCommon StockGBUSDJul 1976
GAPBRSE (Berne Stock Exchange)YesCommon StockCHCHFJul 1976
GPSI34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COM USD0.05BRBRLApr 2016

Biography

The Gap, Inc. operates as an apparel retail company worldwide. The company offers apparel, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, Athleta, Intermix, and Hill City brands. Its products include denim, tees, button-downs, khakis, and other products; and fitness and lifestyle products for use in yoga, training, sports, travel, and everyday activities to women and girls. The company offers its products through company-operated stores, franchise stores, Websites, third-party arrangements, and catalogs. It has franchise agreements with unaffiliated franchisees to operate Old Navy, Gap, and Banana Republic stores in Asia, Europe, Latin America, the Middle East, and Africa. As of February 2, 2019, the company had 3,194 company-operated stores; and 472 franchise stores, as well as e-commerce sites. The Gap, Inc. was founded in 1969 and is headquartered in San Francisco, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 00:02
End of Day Share Price2020/02/21 00:00
Earnings2019/11/02
Annual Earnings2019/02/02


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.