GPS : NYSE : Services
$25.875 up 0.27 | 1.0%
Today's Range: 25.595 - 26.16
Avg. Daily Volume: 5511100.0
04/24/17 - 3:59 PM ET

Financial Analysis


GAP INC's gross profit margin for the fourth quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. GAP INC has weak liquidity. Currently, the Quick Ratio is 0.86 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 14.10% 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.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)4429.04385.0
EBITDA ($mil)468.0531.0
EBIT ($mil)317.0377.0
Net Income ($mil)220.0214.0


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)1783.01370.0
Total Assets ($mil)7610.07473.0
Total Debt ($mil)1313.01731.0
Equity ($mil)2904.02545.0


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin37.1236.49
EBITDA Margin10.5612.1
Operating Margin7.168.6
Sales Turnover2.042.11
Return on Assets8.8812.31
Return on Equity23.2736.14
Debt Q4 FY16 Q4 FY15
Current Ratio1.761.57
Debt/Capital0.310.4
Interest Expense18.018.0
Interest Coverage17.6120.94


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)399.0397.0
Div / share0.230.23
EPS0.550.53
Book value / share7.286.41
Institutional Own % n/a n/a
Avg Daily Volume5484742.06477815.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 23.42 for the Specialty Retail industry and a discount compared to the S&P 500 average of 24.92. Conducting a second comparison, its price-to-book ratio of 3.49 indicates a premium versus the S&P 500 average of 2.99 and a significant discount versus the industry average of 18.58. 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 15.04 Peers 23.42   GPS 5.90 Peers 14.39

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 12.40 Peers 19.05   GPS 0.83 Peers 1.81

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.

 

Discount. 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 significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
GPS 3.49 Peers 18.58   GPS -23.88 Peers 41.21

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 0.65 Peers 1.51   GPS -1.78 Peers 7.24

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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