NYSE:GPS

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Undervalued 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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

8.4%

GPS

3.6%

US Specialty Retail

3.0%

US Market


1 Year Return

-52.6%

GPS

0.3%

US Specialty Retail

9.9%

US Market

Return vs Industry: GPS underperformed the US Specialty Retail industry which returned 0.3% over the past year.

Return vs Market: GPS underperformed the US Market which returned 9.5% over the past year.


Shareholder returns

GPSIndustryMarket
7 Day8.4%3.6%3.0%
30 Day13.7%12.4%8.2%
90 Day-35.6%-7.0%0.4%
1 Year-50.6%-52.6%1.7%0.3%12.4%9.9%
3 Year-55.8%-60.3%21.6%15.7%31.0%22.3%
5 Year-71.9%-76.5%17.7%7.5%58.1%40.3%

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?

10.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GPS ($8.9) is trading below our estimate of fair value ($9.91)

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 (9.5x) compared to the Specialty Retail industry average (12.9x).

PE vs Market: GPS is good value based on its PE Ratio (9.5x) compared to the US market (15.8x).


Price to Earnings Growth Ratio

PEG Ratio: GPS is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: GPS is good value based on its PB Ratio (1x) compared to the US Specialty Retail industry average (1.1x).


Next Steps

Future Growth

How is Gap forecast to perform in the next 1 to 3 years based on estimates from 20 analysts?

27.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GPS's forecast earnings growth (27.8% per year) is above the savings rate (2.2%).

Earnings vs Market: GPS's earnings (27.8% per year) are forecast to grow faster than the US market (22% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

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

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


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GPS's Return on Equity is forecast to be low in 3 years time (10.2%).


Next Steps

Past Performance

How has Gap performed over the past 5 years?

-6.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GPS has a large one-off loss of $467.0M impacting its February 1 2020 financial results.

Growing Profit Margin: GPS's current net profit margins (2.1%) are lower than last year (6%).


Past Earnings Growth Analysis

Earnings Trend: GPS's earnings have declined by -6.6% 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 (-65%) over the past year, making it difficult to compare to the Specialty Retail industry average (-6.3%).


Return on Equity

High ROE: GPS's Return on Equity (10.6%) is considered low.


Next Steps

Financial Health

How is Gap's financial position?


Financial Position Analysis

Short Term Liabilities: GPS's short term assets ($4.5B) exceed its short term liabilities ($3.2B).

Long Term Liabilities: GPS's short term assets ($4.5B) do not cover its long term liabilities ($7.2B).


Debt to Equity History and Analysis

Debt Level: GPS's debt to equity ratio (37.7%) is considered satisfactory.

Reducing Debt: GPS's debt to equity ratio has reduced from 45.4% to 37.7% over the past 5 years.

Debt Coverage: GPS's debt is well covered by operating cash flow (113%).

Interest Coverage: GPS's interest payments on its debt are well covered by EBIT (22.5x coverage).


Balance Sheet


Next Steps

Dividend

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

7.64%

Forecast Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: Unable to evaluate GPS's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate GPS's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if GPS's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if GPS's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: GPS is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of GPS's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

0.3yrs

Average management tenure


CEO

Sonia Syngal (49yo)

0.25

Tenure

US$4,765,962

Compensation

Ms. Sonia Syngal serves as Chief Executive Officer, President and Director at The Gap, Inc. since March 23, 2020. Ms. Syngal served as the Chief Executive Officer and President of Old Navy since April 2016 ...


CEO Compensation Analysis

Compensation vs Market: Sonia's total compensation ($USD4.77M) is about average for companies of similar size in the US market ($USD5.91M).

Compensation vs Earnings: Sonia's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Bobby Martin
Executive Chairman0.25yrUS$306.24k0.014% $460.0k
Sonia Syngal
CEO, President & Director0.25yrUS$4.77m0.025% $835.8k
Julie Gruber
Head of Legal & Compliance and Corporate Secretary4.33yrsUS$2.70m0.011% $363.8k
Teri List-Stoll
Executive Vice Presidentno dataUS$2.61m0.026% $863.3k
Mark Breitbard
President & CEO of Specialty Brands and Head of Specialty Brands3.08yrsUS$4.96m0.020% $650.7k
Katrina O'Connell
Executive VP & CFO0.25yrno data0.0017% $55.4k
Shawn Curran
Head of Operations0.25yrno data0.010% $345.6k
John Strain
Head of e-Commerce & Technology0.25yrno data0.00040% $13.3k
Sally Gilligan
Head of Information & Strategy2.42yrsno datano data
Tina Romani
Senior Director of Investor Relationsno datano datano data

0.3yrs

Average Tenure

53yo

Average Age

Experienced Management: GPS's management team is not considered experienced ( 0.3 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Bobby Martin
Executive Chairman0.25yrUS$306.24k0.014% $460.0k
Sonia Syngal
CEO, President & Director0.25yrUS$4.77m0.025% $835.8k
Jorge Montoya
Independent Director16.25yrsUS$273.86k0.011% $354.9k
Mayo Shattuck
Independent Director18.42yrsUS$298.99k0.027% $902.7k
Robert Fisher
Independent Director30.42yrsUS$1.96m12.48% $414.0m
Isabella Goren
Independent Director8.83yrsUS$265.99k0.0062% $206.3k
Tracy Gardner
Independent Director4.58yrsUS$255.99k0.0028% $93.9k
William Fisher
Independent Director10.58yrsUS$254.99k11.08% $367.5m
John Fisher
Independent Director1.58yrsUS$185.63k8.93% $296.3m
Christopher O'Neill
Independent Director2.33yrsUS$252.87kno data

6.7yrs

Average Tenure

60yo

Average Age

Experienced Board: GPS's board of directors are considered experienced (6.7 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.


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$3.316b
  • Shares outstanding: 372.64m
  • 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
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, Janie and Jack, and Hill City brands. Its products include denim, tees, fleece, 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 1, 2020, the company had 3,345 company-operated stores; and 574 franchise stores, as well as online. 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 Analysis2020/06/01 02:33
End of Day Share Price2020/05/29 00:00
Earnings2020/02/01
Annual Earnings2020/02/01


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.