0.37 | 0.91%
GAP INC's gross profit margin for the fourth quarter of its fiscal year 2012 has increased when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. GAP INC has weak liquidity. Currently, the Quick Ratio is 0.79 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.
During the same period, stockholders' equity ("net worth") has increased by 5.04% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.
| Income Statement | Q4 FY12 | Q4 FY11 |
|---|---|---|
| Net Sales ($mil) | 4725.0 | 4283.0 |
| EBITDA ($mil) | 740.0 | 520.0 |
| EBIT ($mil) | 602.0 | 372.0 |
| Net Income ($mil) | 351.0 | 218.0 |
| Balance Sheet | Q4 FY12 | Q4 FY11 |
|---|---|---|
| Cash & Equiv. ($mil) | 1510.0 | 1891.0 |
| Total Assets ($mil) | 7470.0 | 7422.0 |
| Total Debt ($mil) | 1246.0 | 1665.0 |
| Equity ($mil) | 2894.0 | 2755.0 |
| Profitability | Q4 FY12 | Q4 FY11 |
|---|---|---|
| Gross Profit Margin | 40.51 | 36.26 |
| EBITDA Margin | 15.66 | 12.14 |
| Operating Margin | 12.74 | 8.69 |
| Sales Turnover | 2.1 | 1.96 |
| Return on Assets | 15.19 | 11.22 |
| Return on Equity | 39.21 | 30.23 |
| Debt | Q4 FY12 | Q4 FY11 |
|---|---|---|
| Current Ratio | 1.76 | 2.02 |
| Debt/Capital | 0.3 | 0.38 |
| Interest Expense | 20.0 | 24.0 |
| Interest Coverage | 30.1 | 15.5 |
| Share Data | Q4 FY12 | Q4 FY11 |
|---|---|---|
| Shares outstanding (mil) | 463.0 | 485.0 |
| Div / share | 0.13 | 0.11 |
| EPS | 0.73 | 0.44 |
| Book value / share | 6.25 | 5.68 |
| Institutional Own % | n/a | n/a |
| Avg Daily Volume | 4454875.0 | 5810888.0 |
BUY. This stock's P/E ratio indicates a discount compared to an average of 21.47 for the Specialty Retail industry and a discount compared to the S&P 500 average of 18.47. Conducting a second comparison, its price-to-book ratio of 6.07 indicates a significant premium versus the S&P 500 average of 2.36 and a premium versus the industry average of 5.21. The price-to-sales ratio is below both the S&P 500 average and the industry average, indicating a discount. The valuation analysis reveals that, GAP INC seems to be trading at a discount to investment alternatives within the industry.
| Price/Earnings |
|
Price/Cash Flow |
| |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GPS 16.37 | Peers 21.47 | GPS 9.08 | Peers 14.01 | |||||||||||||||||||||
|
Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations. GPS is trading at a 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. |
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| Price/Projected Earnings |
|
Price to Earnings/Growth |
|
|||||||||||||||||||||
| GPS 13.09 | Peers 18.98 | GPS 1.32 | Peers 1.46 | |||||||||||||||||||||
|
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 discount to its peers. |
Average. 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 trades at a valuation on par to its peers. |
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| Price/Book |
|
Earnings Growth |
|
|||||||||||||||||||||
| GPS 6.07 | Peers 5.21 | GPS 47.77 | Peers 17.18 | |||||||||||||||||||||
|
Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. GPS is trading at a premium to its peers. |
Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. GPS is expected to have an earnings growth rate that significantly exceeds its peers. |
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| Price/Sales |
|
Sales Growth |
|
|||||||||||||||||||||
| GPS 1.12 | Peers 1.29 | GPS 7.57 | Peers 8.53 | |||||||||||||||||||||
|
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 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 trails its peers on the basis of sales growth |
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