GAP (GAP) & Its Peers Critical Review

GAP (NYSE:GAPGet Free Report) is one of 15 public companies in the “Family clothing stores” industry, but how does it weigh in compared to its peers? We will compare GAP to similar companies based on the strength of its earnings, risk, valuation, profitability, institutional ownership, dividends and analyst recommendations.

Profitability

This table compares GAP and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GAP 5.05% 28.89% 6.92%
GAP Competitors 3.12% -376.16% 6.89%

Insider and Institutional Ownership

73.0% of shares of all “Family clothing stores” companies are held by institutional investors. 12.5% of shares of all “Family clothing stores” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares GAP and its peers gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
GAP $15.17 billion $502.00 million -0.79
GAP Competitors $10.54 billion $637.10 million 10.73

GAP has higher revenue, but lower earnings than its peers. GAP is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Risk & Volatility

GAP has a beta of 2.35, meaning that its stock price is 135% more volatile than the S&P 500. Comparatively, GAP’s peers have a beta of 2.17, meaning that their average stock price is 117% more volatile than the S&P 500.

Dividends

GAP pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. GAP pays out -2.2% of its earnings in the form of a dividend. As a group, “Family clothing stores” companies pay a dividend yield of 1.4% and pay out -173.8% of their earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings and price targets for GAP and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GAP 0 3 0 0 2.00
GAP Competitors 359 2138 2392 31 2.43

GAP currently has a consensus target price of $27.00, suggesting a potential upside of 26.05%. As a group, “Family clothing stores” companies have a potential upside of 9.52%. Given GAP’s higher probable upside, analysts clearly believe GAP is more favorable than its peers.

Summary

GAP peers beat GAP on 8 of the 15 factors compared.

GAP Company Profile

(Get Free Report)

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 adult apparel and accessories; 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, and third-party arrangements. It has franchise agreements to operate Old Navy, Gap, Banana Republic, and Athleta stores and websites in Asia, Europe, Latin America, the Middle East, and Africa. The Gap, Inc. was incorporated in 1969 and is headquartered in San Francisco, California.

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