Gap Inc (GAP) AI Stock Analysis

• Market Cap: $7.79B
• Dividend Yield: 3.02%
• Average Volume (3M): 7.55M
• Price to Earnings (P/E): 9.1
• Beta (1Y): 1.27
• Revenue Growth: 1.07%
• EPS Growth: 28.03%
• Country: US
• Employees: 82,000
• Sector: Consumer Cyclical
• Sector Strength: 75
• Industry: Apparel - Retail
• EPS (TTM): 0.51
• Shares Outstanding: 373,066,500
• 10 Day Avg. Volume: 7,192,897
• 30 Day Avg. Volume: 7,551,317
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.55
• Enterprise Value/Revenue: 0.79
• Enterprise Value/Gross Profit: 1.92
• Enterprise Value/Ebitda: 6.82
• 1Y Price Target: $26.86
• Price Target Upside: 28.64% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 73 Outperform
• Price Target: $22.00 ▲(5.36% Upside)

Gap Inc's overall score is driven by its solid financial performance and attractive valuation, indicating good value. While technical indicators show bearish trends, the company's strategic initiatives and positive earnings call sentiment reinforce its resilience. The recent leadership change at Athleta adds a positive outlook for that segment.

Positive Factors

Profitability prospects

All brands are showing improving profitability trajectories, increasing confidence in future margin growth.

Strategic initiatives

Ongoing efforts and proof points for brand reinvigoration across different brands.

Negative Factors

Revenue growth challenges

Management clarified 2Q’s forecasted flat revenue growth rate is negatively impacted by a ~100bps headwind associated with the lap YOY of a 1x benefit LY from the credit card program and a ~100bps headwind associated with store closures.

Tariff challenges

The stock is expected to come under pressure due to larger tariff headwinds than previously expected.

Gap Inc Business Overview & Revenue Model

Company Description

Gap Inc. (GAP) is a global retailer specializing in apparel and accessories for men, women, and children. Founded in 1969, the company operates several well-known brands, including Gap, Banana Republic, Old Navy, Athleta, and Intermix. With a focus on casual and stylish clothing, Gap Inc. serves a diverse customer base through both physical retail stores and an expanding online presence, catering to various market segments and lifestyle choices.

How the Company Makes Money

Gap Inc. generates revenue primarily through the sale of clothing, accessories, and personal care products across its various brands. The company operates a multi-channel retail strategy, combining brick-and-mortar stores with a robust online shopping platform, which allows for wider market reach and increased sales opportunities. Key revenue streams include direct sales from retail locations, e-commerce sales, and wholesale distribution to third-party retailers. Additionally, Gap Inc. has entered into strategic partnerships and collaborations with other brands and influencers to enhance its product offerings and drive customer engagement. Seasonal promotions, loyalty programs, and targeted marketing campaigns also contribute significantly to its earnings, helping to attract and retain customers in a competitive retail environment.

Gap Inc Financial Statement Overview

Summary

Gap Inc presents a robust financial profile characterized by improved profitability, efficient operations, and solid cash management. Strong margins and returns indicate good financial health, despite modest revenue growth.

Income Statement

Gap Inc shows strong recovery and steady growth in recent years. The Gross Profit Margin for TTM (Trailing-Twelve-Months) is 41.38%, indicating good cost management. The Net Profit Margin is 5.80%, an improvement from previous years. Revenue growth is modest at 0.50% from the prior year, showing stability. The EBIT Margin is 7.70% and EBITDA Margin is 10.68%, reflecting healthy operational efficiency.

Balance Sheet

Gap Inc's Balance Sheet highlights a moderate Debt-to-Equity ratio of 1.65, suggesting a balanced leverage situation. The Return on Equity (ROE) for TTM is 26.47%, which is robust and indicates effective use of equity. The Equity Ratio stands at 28.71%, reflecting adequate equity base compared to total assets.

Cash Flow

The company has a stable cash flow position, with Operating Cash Flow to Net Income Ratio at 1.50, indicating strong cash earnings. The Free Cash Flow to Net Income Ratio is 1.00, demonstrating efficient cash conversion. Free Cash Flow growth has been positive, though it shows a decline from the previous year.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.09B	14.89B	15.62B	16.67B	13.80B
Gross Profit	6.23B	5.78B	5.36B	6.64B	4.71B
EBITDA	1.72B	1.17B	489.43M	994.00M	-403.00M
Net Income	844.00M	502.00M	-202.00M	256.00M	-665.00M
Balance Sheet
Total Assets	11.88B	11.04B	11.39B	12.76B	13.77B
Cash, Cash Equivalents and Short-Term Investments	2.59B	1.87B	1.22B	877.00M	2.40B
Total Debt	5.47B	5.44B	6.02B	6.25B	7.66B
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: Neutral
• Last Price: 20.88
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Neutral. The current price of 20.88 is above the 20-day moving average (MA) of 20.12, below the 50-day MA of 21.03, and below the 200-day MA of 22.07, indicating a neutral trend. The MACD of -0.24 indicates Negative momentum. The RSI at 53.38 is Neutral, neither overbought nor oversold. The STOCH value of 92.93 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GAP.

Gap Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ANF	80 Outperform	$4.84B	9.97	46.98%	―	12.54%	25.47%
BKE	79 Outperform	$2.87B	14.44	44.55%	6.96%	-1.08%	-8.20%
URBN	79 Outperform	$6.93B	16.19	19.55%	―	8.38%	52.18%
GAP	73 Outperform	$7.79B	9.10	29.16%	3.02%	1.07%	28.03%
AEO	72 Outperform	$2.17B	12.83	12.19%	3.96%	-0.95%	-10.51%
Sector *	61 Neutral	$17.22B	11.49	-5.97%	3.08%	1.37%	-15.54%
FL	50 Neutral	$2.45B	194.63	-12.85%	―	-2.62%	0.93%

Gap Inc Corporate Events

Gap Inc Announces New CEO for Athleta

On July 29, 2025, Gap Inc. announced that Chris Blakeslee will step down as President and CEO of Athleta, effective July 31, 2025, with his last day being November 3, 2025. Maggie Gauger, with over 20 years of leadership experience in women’s active apparel, will succeed him starting August 1, 2025. Gauger’s appointment is part of Gap Inc.’s strategy to accelerate Athleta’s growth in the women’s active market, leveraging her expertise in business transformation and consumer engagement. This leadership transition aims to further Athleta’s mission of empowering women and enhancing its market position.

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.

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.