Gap Inc (GAP) AI Stock Analysis

• Market Cap: $10.72B
• Dividend Yield: 2.16%
• Average Volume (3M): 8.21M
• Price to Earnings (P/E): 12.9
• Beta (1Y): 1.32
• Revenue Growth: 1.32%
• EPS Growth: 65.83%
• Country: US
• Employees: 82,000
• Sector: Consumer Cyclical
• Sector Strength: 74
• Industry: Apparel - Retail
• EPS (TTM): 0.54
• Shares Outstanding: 376,603,730
• 10 Day Avg. Volume: 9,980,212
• 30 Day Avg. Volume: 8,214,935
• PEG Ratio: 7.42
• Price to Book (P/B): 2.62
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.21
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 0.19
• Enterprise Value/Gross Profit: 1.56
• Enterprise Value/Ebitda: 1.84
• 1Y Price Target: $27.71
• Price Target Upside: -2.64% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 73 Outperform
• Price Target: ―

Gap Inc. is well-positioned in the retail sector, backed by strong financial performance and attractive valuation metrics. The earnings call highlighted significant achievements and positive guidance for the future, although technical analysis indicates potential resistance levels. The company's ability to continue enhancing profitability and market share while maintaining financial discipline supports a positive outlook, despite some challenges in specific segments.

Positive Factors

Brand Strength

Momentum building at Gap is expected to continue, benefiting long-term brand strength.

Capital Allocation

GAP's capital allocation priorities include investing in growth, increasing dividends, and strategically buying back shares.

Earnings

GAP reported a strong F4Q beat and provided healthy initial FY25 guidance.

Financial Performance

Management is expected to maintain sales guidance above consensus, indicating confidence in future performance.

Negative Factors

Guidance

Despite strong performance, a lack of guidance raise is viewed as conservatism, which could affect market expectations.

Weather Impact

Weather disruptions led to softer demand in early February, affecting sales performance.

Gap Inc Business Overview & Revenue Model

Company Description

The Gap, Inc. operates as an apparel retail company. The company offers apparel, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, and Athleta brands. Its products include denim, tees, fleece, and khakis; eyewear, jewelry, shoes, handbags, and fragrances; and fitness and lifestyle products for use in yoga, training, sports, travel, and everyday activities for 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, Athleta, and Banana Republic stores and websites in Asia, Europe, Latin America, the Middle East, and Africa. As of December 31, 2021, the company had 2,835 company-operated stores and 564 franchise stores. It also provides its products through e-commerce sites. The Gap, Inc. was incorporated in 1969 and is headquartered in San Francisco, California.

How the Company Makes Money

Gap Inc. generates revenue primarily through the sale of apparel and accessories under its various brand names. The company's revenue streams include sales from physical retail stores, which are either company-owned or franchised, and online sales through its e-commerce platforms. Gap Inc. capitalizes on its diverse brand portfolio to target different customer segments, from value-focused consumers at Old Navy to more premium offerings at Banana Republic and Athleta. Additionally, Gap Inc. benefits from strategic partnerships and collaborations with other brands and designers, which help attract new customers and drive sales. The company also invests in marketing and loyalty programs to boost customer retention and increase average transaction value, further contributing to its earnings.

Gap Inc Financial Statement Overview

Summary

Gap Inc. exhibits a solid financial foundation characterized by improved profitability, efficient cash flow generation, and a moderate leverage profile. While revenue growth is steady, the company has successfully enhanced its margins and return on equity. The balance sheet and cash flow statements reflect prudent financial management, positioning the company well to navigate competitive pressures in the retail industry. Continued focus on operational efficiency and strategic investments will be critical for sustaining growth and financial stability.

Income Statement

Gap Inc. demonstrated strong improvements in profitability with a gross profit margin of 49.59% and a net profit margin of 5.59% for the latest fiscal year. The EBIT margin rose to 7.37%, highlighting improved operational efficiency. Revenue grew by 1.32% year-over-year, indicating modest growth in a competitive retail environment. The EBITDA margin of 10.71% showcases solid earnings before interest, taxes, depreciation, and amortization. These figures suggest a positive trajectory compared to previous years, though the revenue growth remains conservative.

Balance Sheet

The balance sheet reflects a solid equity position with a debt-to-equity ratio of 1.68, indicating moderate leverage. The return on equity improved to 25.86%, underscoring efficient use of equity to generate profits. However, the equity ratio of 27.47% suggests that a significant portion of assets is financed by debt, which could pose risks if market conditions worsen. Overall, the balance sheet demonstrates balanced financial management with a focus on maintaining equity strength while leveraging debt cautiously.

Cash Flow

Gap Inc. showed robust cash flow metrics with a free cash flow to net income ratio of 1.23, reflecting effective conversion of earnings into cash. The operating cash flow to net income ratio of 1.76 further emphasizes strong cash generation capabilities. Despite a slight decline in free cash flow growth, the company's ability to generate substantial free cash flow supports its operational and strategic initiatives. The cash flow statements indicate healthy liquidity and financial flexibility.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
15.09B	14.89B	15.62B	16.67B	13.80B
	Gross Profit
7.48B	5.78B	5.36B	6.64B	4.71B
	EBIT
1.11B	622.00M	-69.00M	1.14B	-862.00M
	EBITDA
1.72B	1.17B	489.43M	994.00M	-403.00M
	Net Income Common Stockholders
844.00M	502.00M	-202.00M	256.00M	-665.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.59B	1.87B	1.22B	877.00M	2.40B
	Total Assets
11.88B	11.04B	11.39B	12.76B	13.77B
	Total Debt
5.47B	5.44B	6.02B	6.25B	7.66B
	Net Debt
3.14B	3.57B	4.80B	5.37B	5.68B
	Total Liabilities
8.62B	8.45B	9.15B	10.04B	11.15B
	Stockholders Equity
3.26B	2.60B	2.23B	2.72B	2.61B
Cash Flow		Free Cash Flow
1.04B	1.11B	-78.00M	115.00M	-155.00M
	Operating Cash Flow
1.49B	1.53B	607.00M	809.00M	237.00M
	Investing Cash Flow
-692.00M	-334.00M	-227.00M	-446.00M	-510.00M
	Financing Cash Flow
-321.00M	-567.00M	6.00M	-1.47B	895.00M

Gap Inc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 28.46
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GAP, the sentiment is Positive. The current price of 28.46 is above the 20-day moving average (MA) of 24.77, above the 50-day MA of 21.79, and above the 200-day MA of 22.14, indicating a bullish trend. The MACD of 2.02 indicates Negative momentum. The RSI at 74.32 is Negative, neither overbought nor oversold. The STOCH value of 85.92 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GAP.

Gap Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
URBN	81 Outperform	$6.70B	15.14	19.55%	―	8.38%	52.18%
BKE	79 Outperform	$2.11B	10.59	44.55%	3.40%	-1.08%	-8.20%
GAP	73 Outperform	$10.72B	12.95	28.81%	2.16%	1.32%	65.83%
AEO	71 Outperform	$1.85B	6.38	18.80%	4.67%	1.27%	96.32%
ANF	65 Neutral	$3.49B	6.84	47.77%	―	15.60%	71.45%
Sector *	62 Neutral	$6.84B	11.22	2.83%	3.95%	2.65%	-21.93%
FL	56 Neutral	$2.27B	193.08	0.62%	―	-2.20%	―

Gap Inc Corporate Events

Gap Inc Holds Annual Shareholder Meeting

On May 20, 2025, Gap Inc held its annual meeting of shareholders, where a quorum was present with 353,826,312 shares represented. During the meeting, shareholders voted to elect the directors nominated by the Board, ratified the selection of Deloitte & Touche LLP as the independent accountant for the fiscal year ending January 31, 2026, and approved the overall compensation of the company’s named executive officers on an advisory basis.

The most recent analyst rating on (GAP) stock is a Hold with a $25.00 price target. To see the full list of analyst forecasts on Gap Inc stock, see the GAP Stock Forecast page.