Gap Inc (GAP) AI Stock Analysis

• Market Cap: $8.34B
• Dividend Yield: 3.05%
• Average Volume (3M): 12.35M
• Price to Earnings (P/E): 9.7
• Beta (1Y): 1.23
• Revenue Growth: 1.07%
• EPS Growth: 28.03%
• Country: US
• Employees: 82,000
• Sector: Consumer Cyclical
• Sector Strength: 57
• Industry: Apparel - Retail
• EPS (TTM): 0.51
• Shares Outstanding: 373,066,500
• 10 Day Avg. Volume: 17,231,247
• 30 Day Avg. Volume: 12,348,850
• PEG Ratio: 0.13
• Price to Book (P/B): 2.17
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -62.11
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 0.16
• Enterprise Value/Gross Profit: 1.54
• Enterprise Value/Ebitda: 1.47
• 1Y Price Target: $28.00
• Price Target Upside: 34.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 72 Outperform
• Price Target: $25.00 ▲(19.85%Upside)

Gap Inc's strong financial performance and valuation are the most significant factors driving the stock score. The company shows robust profitability and operational efficiency, supported by an attractive P/E ratio and dividend yield. Technical indicators suggest some caution, but the positive earnings call offsets brand-specific challenges, leading to a favorable overall stock score.

Positive Factors

Financial Performance

Strong sales and lower SG&A drove earnings per share beyond consensus expectations.

Market Share

Gap & Old Navy combined represent ~80% of sales on a path of 8+ consecutive quarters of market share gains and new customer acquisition.

Strategic Initiatives

Ongoing brand reinvigoration strategies are showing proof points of success.

Negative Factors

Guidance

Tariff-impacted guidance implies a significant EPS cut.

Performance Expectations

The Gap brand's performance fell short of high market expectations.

Tariff Impact

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

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 presents a robust financial profile characterized by improved profitability, efficient operations, and solid cash management. The company maintains strong margins and returns, with moderate leverage and a healthy equity position. However, revenue growth is only steady, not exceptional.

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
TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
16.16B	15.09B	14.89B	15.62B	16.67B	13.80B
	Gross Profit
6.10B	6.23B	5.78B	5.36B	6.64B	4.71B
	EBIT
373.00M	1.11B	560.00M	-69.00M	810.00M	-862.00M
	EBITDA
567.00M	1.72B	1.17B	489.43M	994.00M	-403.00M
	Net Income Common Stockholders
-72.00M	844.00M	502.00M	-202.00M	256.00M	-665.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.22B	2.59B	1.87B	1.22B	877.00M	2.40B
	Total Assets
11.85B	11.88B	11.04B	11.39B	12.76B	13.77B
	Total Debt
5.47B	5.47B	5.44B	6.02B	6.25B	7.66B
	Net Debt
3.50B	3.14B	3.57B	4.80B	5.37B	5.68B
	Total Liabilities
8.72B	8.62B	8.45B	9.15B	10.04B	11.15B
	Stockholders Equity
3.13B	3.26B	2.60B	2.23B	2.72B	2.61B
Cash Flow		Free Cash Flow
-691.00M	1.04B	1.11B	-78.00M	115.00M	-155.00M
	Operating Cash Flow
107.00M	1.49B	1.53B	607.00M	809.00M	237.00M
	Investing Cash Flow
-180.00M	-692.00M	-334.00M	-227.00M	-446.00M	-510.00M
	Financing Cash Flow
-1.14B	-321.00M	-567.00M	6.00M	-1.47B	895.00M

Gap Inc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 20.86
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GAP, the sentiment is Negative. The current price of 20.86 is below the 20-day moving average (MA) of 24.65, below the 50-day MA of 22.53, and below the 200-day MA of 22.17, indicating a bearish trend. The MACD of -0.68 indicates Positive momentum. The RSI at 35.84 is Neutral, neither overbought nor oversold. The STOCH value of 37.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$6.21B	14.49	19.55%	―	8.38%	52.18%
BKE	75 Outperform	$2.23B	11.01	44.55%	3.21%	-1.08%	-8.20%
GAP	72 Outperform	$8.34B	9.74	29.16%	3.05%	1.07%	28.03%
ANF	67 Neutral	$3.75B	7.35	46.98%	―	12.54%	25.47%
AEO	64 Neutral	$1.75B	10.35	12.19%	4.96%	-0.95%	-10.51%
Sector *	62 Neutral	$6.90B	11.05	2.80%	4.27%	2.67%	-24.92%
FL	56 Neutral	$2.31B	194.63	-12.85%	―	-2.62%	0.93%

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.