Gap Inc (GAP) AI Stock Analysis

• Market Cap: $10.07B
• Dividend Yield: 2.66%
• Average Volume (3M): 9.73M
• Price to Earnings (P/E): 12.1
• Beta (1Y): 1.16
• Revenue Growth: 0.29%
• EPS Growth: 3.65%
• Country: US
• Employees: 82,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): 0.62
• Shares Outstanding: 371,921,750
• 10 Day Avg. Volume: 11,606,627
• 30 Day Avg. Volume: 9,733,317
• PEG Ratio: 0.17
• Price to Book (P/B): 2.77
• Price to Sales (P/S): 0.60
• P/FCF Ratio: 8.71
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 0.76
• Enterprise Value/Gross Profit: 1.86
• Enterprise Value/Ebitda: 6.80
• 1Y Price Target: $28.43
• Price Target Upside: 5.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 2.14
• Revenue Forecast (FY): $15.36B

• Rating: 76 Outperform
• Price Target: $30.00 ▲(10.82% Upside)

Gap Inc. receives a strong overall score driven by robust earnings performance and positive technical indicators. The company's effective financial management and strategic initiatives have contributed to its positive outlook. While valuation metrics are favorable, challenges such as Athleta's performance and tariff impacts on margins need monitoring.

Positive Factors

Revenue Growth

Sustained revenue growth indicates robust demand across Gap Inc.'s brands, supporting long-term market presence and financial stability.

Brand Performance

Strong brand performance, particularly in Old Navy and Gap, highlights effective market strategies and brand strength, ensuring competitive advantage.

Technological Advancements

Investments in technology enhance operational efficiency and supply chain resilience, positioning Gap Inc. for sustained competitive advantage.

Negative Factors

High Leverage

High leverage could limit financial flexibility and increase risk, necessitating careful debt management to maintain long-term financial health.

Cash Flow Challenges

Declining free cash flow growth may constrain Gap Inc.'s ability to invest in growth initiatives, impacting long-term strategic execution.

Athleta's Performance

Athleta's declining sales indicate brand-specific challenges, potentially affecting Gap Inc.'s overall growth and market diversification strategy.

Gap Inc Business Overview & Revenue Model

Company Description

Gap Inc. is a global retailer that operates multiple brands, including Gap, Banana Republic, Old Navy, and Athleta. Founded in 1969, the company offers a range of apparel, accessories, and personal care products for men, women, and children. With a focus on casual and contemporary styles, Gap Inc. serves customers through various channels, including brick-and-mortar stores, online platforms, and mobile applications, aiming to provide accessible, fashionable clothing to a diverse audience.

How the Company Makes Money

Gap Inc. generates revenue primarily through the sale of its clothing and accessories across its various brands. The company operates a multi-channel retail model, which includes physical stores, e-commerce websites, and mobile applications, allowing it to reach a broad customer base. Key revenue streams include direct sales from retail locations, online sales, and wholesale partnerships with other retailers. Additionally, Gap Inc. benefits from seasonal promotions, loyalty programs, and collaborations with other brands, which drive customer engagement and enhance sales. The company's strategic focus on inventory management, marketing initiatives, and customer experiences also contribute to its overall earnings.

Gap Inc Financial Statement Overview

Summary

Gap Inc. demonstrates solid financial performance with significant improvements in revenue growth and profitability. The company has effectively managed its leverage, resulting in a healthier balance sheet. Cash flow generation is strong, although historical volatility in growth rates suggests the need for cautious cash flow management.

Income Statement

Gap Inc. has shown a strong recovery in its income statement metrics. The TTM data indicates a significant revenue growth rate of 74.5%, reflecting a robust rebound. Gross profit margin is healthy at 41%, and the net profit margin has improved to 5.57%. EBIT and EBITDA margins are also solid, indicating effective cost management and operational efficiency. However, the company has experienced fluctuations in revenue growth in previous years, which could pose a risk if not managed well.

Balance Sheet

The balance sheet shows a moderate level of financial stability. The debt-to-equity ratio has improved to 1.51 in the TTM period, indicating better leverage management compared to previous years. Return on equity is strong at 24.91%, reflecting good profitability relative to shareholder equity. However, the equity ratio is relatively low, suggesting a higher reliance on debt financing, which could be a risk if market conditions change.

Cash Flow

Cash flow metrics indicate a positive trend with a free cash flow growth rate of 130% in the TTM period, showcasing strong cash generation capabilities. The operating cash flow to net income ratio is 0.37, and the free cash flow to net income ratio is 0.64, both indicating efficient cash flow management. Despite these strengths, the company has experienced volatility in free cash flow growth in past periods, which could impact future cash flow stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.28B	15.09B	14.89B	15.62B	16.67B	13.80B
Gross Profit	6.27B	6.23B	5.78B	5.36B	6.64B	4.71B
EBITDA	1.72B	1.72B	1.17B	489.43M	994.00M	-403.00M
Net Income	851.00M	844.00M	502.00M	-202.00M	256.00M	-665.00M
Balance Sheet
Total Assets	12.37B	11.88B	11.04B	11.39B	12.76B	13.77B
Cash, Cash Equivalents and Short-Term Investments	2.52B	2.59B	1.87B	1.22B	877.00M	2.40B
Total Debt	5.52B	5.47B	5.44B	6.02B	6.25B	7.66B
Total Liabilities	8.72B	8.62B	8.45B	9.15B	10.04B	11.15B
Stockholders Equity	3.65B	3.26B	2.60B	2.23B	2.72B	2.61B
Cash Flow
Free Cash Flow	779.00M	1.04B	1.11B	-78.00M	115.00M	-155.00M
Operating Cash Flow	1.22B	1.49B	1.53B	607.00M	809.00M	237.00M
Investing Cash Flow	-443.00M	-692.00M	-334.00M	-227.00M	-446.00M	-510.00M
Financing Cash Flow	-486.00M	-321.00M	-567.00M	6.00M	-1.47B	895.00M

Gap Inc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 27.07
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• 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 27.07 is above the 20-day moving average (MA) of 24.21, above the 50-day MA of 22.80, and above the 200-day MA of 21.85, indicating a bullish trend. The MACD of 1.00 indicates Negative momentum. The RSI at 67.81 is Neutral, neither overbought nor oversold. The STOCH value of 84.74 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
ANF	78 Outperform	$4.61B	9.38	40.72%	―	7.57%	1.75%
URBN	77 Outperform	$6.64B	13.99	19.34%	―	11.09%	51.51%
GAP	76 Outperform	$10.07B	12.12	25.10%	2.66%	0.29%	3.65%
BKE	76 Outperform	$2.89B	13.87	41.26%	6.91%	4.67%	3.46%
AEO	73 Outperform	$3.45B	19.64	12.17%	2.45%	-2.73%	-16.71%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
FL	44 Neutral	―	―	―	―	-3.58%	-4.20%

Gap Inc Corporate Events

Gap Inc. Reports Strong Q3 2025 Results

Gap Inc., the largest specialty apparel company in the U.S., is known for its iconic brands such as Old Navy, Gap, Banana Republic, and Athleta, offering clothing and lifestyle products globally through both physical and online stores.

Gap Inc Appoints Jody Gerson to Board of Directors

On September 15, 2025, Gap Inc. announced the appointment of Jody Gerson, Chairman and CEO of Universal Music Publishing Group, to its Board of Directors. Gerson, a pioneer in the music industry, is expected to enhance Gap’s strategy at the intersection of fashion and music, leveraging her extensive experience to strengthen the brand’s cultural resonance and support its long-term strategic goals.

The most recent analyst rating on (GAP) stock is a Hold with a $22.00 price target. To see the full list of analyst forecasts on Gap Inc stock, see the GAP Stock Forecast page.

Gap Inc. Earnings Call Highlights Growth Amid Challenges

The recent earnings call for Gap Inc. conveyed a generally positive sentiment, highlighting the company’s sales growth and robust financial performance across its major brands, particularly Gap and Old Navy. Despite these successes, challenges such as the underperformance of Athleta and the impact of tariffs on operating margins were also noted.

Gap Inc. Reports Steady Q2 2025 Performance

Gap Inc., the largest specialty apparel company in the U.S., operates iconic brands like Old Navy, Gap, Banana Republic, and Athleta, offering clothing and lifestyle products worldwide through both physical and online stores. In its second quarter of fiscal 2025, Gap Inc. reported flat net sales compared to the previous year, with a notable achievement of positive comparable sales for the sixth consecutive quarter, driven by its major brands. The company also saw a 6% increase in diluted earnings per share, reaching $0.57, and a 13% increase in cash and short-term investments, totaling $2.4 billion.