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Gap Inc
GPS : NYSE : Services
$23.77 -0.13 | -0.54%
Today's Range: 23.13 - 24.03
Avg. Daily Volume: 6,384,300
02/05/16 - 3:59 PM ET

Financial Analysis


GAP INC's gross profit margin for the third quarter of its fiscal year 2015 has decreased when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry.

During the same period, stockholders' equity ("net worth") has decreased by 8.61% from the same quarter last year.

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Income Statement Q3 FY15 Q3 FY14
Net Sales ($mil)3857.03972.0
EBITDA ($mil)571.0695.0
EBIT ($mil)427.0554.0
Net Income ($mil)248.0351.0


Balance Sheet Q3 FY15 Q3 FY14
Cash & Equiv. ($mil)1042.0954.0
Total Assets ($mil)7806.07819.0
Total Debt ($mil)1752.01380.0
Equity ($mil)2609.02855.0


Profitability Q3 FY15 Q3 FY14
Gross Profit Margin41.2243.73
EBITDA Margin14.817.49
Operating Margin11.0713.95
Sales Turnover2.072.08
Return on Assets13.1315.98
Return on Equity39.2843.78
Debt Q3 FY15 Q3 FY14
Current Ratio1.581.71
Debt/Capital0.40.33
Interest Expense19.019.0
Interest Coverage22.4729.16


Share Data Q3 FY15 Q3 FY14
Shares outstanding (mil)404.42424.0
Div / share0.230.22
EPS0.610.8
Book value / share6.456.73
Institutional Own % n/a n/a
Avg Daily Volume6258392.05341040.0

Valuation


HOLD. GAP INC's P/E ratio indicates a significant discount compared to an average of 23.72 for the Specialty Retail industry and a significant discount compared to the S&P 500 average of 20.88. Conducting a second comparison, its price-to-book ratio of 3.72 indicates a premium versus the S&P 500 average of 2.48 and a significant discount versus the industry average of 10.67. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, GAP INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
GPS 9.84 Peers 23.72   GPS 5.66 Peers 15.28

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

GPS is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

GPS is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
GPS 9.88 Peers 20.43   GPS NM Peers 2.08

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

GPS is trading at a significant discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

GPS's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
GPS 3.72 Peers 10.67   GPS -13.17 Peers 22.21

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

GPS is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, GPS is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
GPS 0.60 Peers 1.54   GPS -1.12 Peers 5.89

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

GPS is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

GPS significantly trails its peers on the basis of sales growth

 

 

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