Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A . The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, solid stock price performance, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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Highlights from the ratings report include:
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Specialty Retail industry average. The net income increased by 28.6% when compared to the same quarter one year prior, rising from $189.00 million to $243.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 13.0%. Since the same quarter one year prior, revenues slightly increased by 5.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 40.00% and other important driving factors, this stock has surged by 116.14% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GPS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Net operating cash flow has significantly increased by 84.75% to $606.00 million when compared to the same quarter last year. In addition, GAP INC has also vastly surpassed the industry average cash flow growth rate of -20.89%.
- 43.90% is the gross profit margin for GAP INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.80% trails the industry average.
The Gap, Inc. operates as a specialty retailer. The company offers apparel, accessories, and personal care products for men, women, children, and babies under the Gap, Old Navy, Banana Republic, Piperlime, and Athleta brand names. The company has a P/E ratio of 19.8, equal to the average retail industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Gap has a market cap of $17.05 billion and is part of the
industry. Shares are up 91.2% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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