Fact based stock research
Gap (NYSE:GPS)

US3647601083

How to read the ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Gap stock research in summary

gapinc.com

ANALYSIS: With an Obermatt Combined Rank of 67 (better than 67% compared with investment alternatives), Gap (Apparel Retail, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Gap are a good value (attractively priced) with a consolidated Value Rank of 59 (better than 59% of alternatives), show above-average growth (Growth Rank of 51), and are safely financed (Safety Rank of 55), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 67, is a buy recommendation based on Gap's financial characteristics. As the company Gap's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 59), above-average growth (Obermatt Growth Rank of 51), and indicate that the company is safely financed (Obermatt Safety Rank of 55), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Gap. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	59
Growth Rank	51
Safety Rank	55
Combined Rank	67

Country	USA
Industry	Apparel Retail
Index	Dividends USA, Diversity USA, Human Rights, S&P US Luxury, S&P 500
Size class	XX-Large

This stock has achievements: Top 10 Stock.

18-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Gap

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	91	91	60	59
GROWTH
GROWTH	72	21	91	51
SAFETY
SAFETY	7	37	18	55
SENTIMENT
SENTIMENT	n/a	5	62	^new
360° VIEW
360° VIEW	n/a	27	61	^new

Most recent update of the stock research: 18-Apr-2024. Financial reporting date used for calculating ranks: 3-Feb-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Gap is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	91	91	60	59
GROWTH
GROWTH	72	21	91	51
SAFETY
SAFETY	7	37	18	55
COMBINED
COMBINED	79	56	66	67

Last update of combined financial performance: 18-Apr-2024. Stock analysis on combined financial performance: The higher the rank of Gap the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 59 (better than 59% compared with alternatives), Gap shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Gap. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 88% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 48 which means that the stock price compared with what market professionals expect for future profits is higher than 52% of comparable companies, indicating a low value concerning Gap's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 47 which means that the stock price compared with what market professionals expect for future profit levels is higher than 53% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 35 is also low. Compared with invested capital, the stock price is higher than for 65% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 59, is a buy recommendation based on Gap's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Gap? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Gap only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	72	74	49	48
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	79	55	42	47
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	54	60	40	35
DIVIDEND YIELD
DIVIDEND YIELD	56	92	86	88
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	91	91	60	59

Last update of Value Rank: 18-Apr-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Gap; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 51 (better than 51% compared with alternatives), Gap shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Gap. Capital Growth has a rank of 52, which means that currently professionals expect the company to grow its invested capital more than 39% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 97 (above 97% of alternative investments). But Sales Growth has only a rank of 20, which means that, currently, professionals expect the company to grow less than 80% of its competitors, and Profit Growth is also low at a rank of 39. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 51, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Gap, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	45	27	34	20
PROFIT GROWTH
PROFIT GROWTH	28	66	98	39
CAPITAL GROWTH
CAPITAL GROWTH	n/a	39	70	52
STOCK RETURNS
STOCK RETURNS	42	11	97	97
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	72	21	91	51

Last update of Growth Rank: 18-Apr-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Gap.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 55 (better than 55% compared with alternatives), the company Gap has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Gap is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Gap. Refinancing is at 58, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 58% of its competitors. Liquidity is also good at 60, meaning the company generates more profit to service its debt than 60% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 45, which means the company has an above-average debt-to-equity ratio. It has more debt than 55% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 55 (better than 55% compared with alternatives), Gap has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Gap could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Gap and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	20	42	32	45
REFINANCING
REFINANCING	54	70	54	58
LIQUIDITY
LIQUIDITY	24	18	11	60
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	7	37	18	55

Last update of Safety Rank: 18-Apr-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Gap and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	20	31	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	53	72	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	15	56	^new
MARKET PULSE
MARKET PULSE	n/a	22	63	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	5	62	^new

Last update of Sentiment Rank: 18-Apr-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Gap.
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