GPS : NYSE : Services
$22.62 | %
Today's Range: 22.55 - 22.95
Avg. Daily Volume: 6,556,500
09/23/16 - 4:03 PM ET

Financial Analysis


GAP INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged 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 remained virtually unchanged only decreasing by 4.19% from the same quarter last year.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)3851.03898.0
EBITDA ($mil)584.0609.0
EBIT ($mil)429.0463.0
Net Income ($mil)125.0219.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)1681.01043.0
Total Assets ($mil)7737.07287.0
Total Debt ($mil)1745.01348.0
Equity ($mil)2559.02671.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin41.7341.71
EBITDA Margin15.1615.62
Operating Margin11.1411.88
Sales Turnover2.012.23
Return on Assets9.2215.47
Return on Equity27.942.23
Debt Q2 FY16 Q2 FY15
Current Ratio1.551.81
Debt/Capital0.410.34
Interest Expense18.018.0
Interest Coverage23.8325.72


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)398.0410.0
Div / share0.230.23
EPS0.310.52
Book value / share6.436.51
Institutional Own % n/a n/a
Avg Daily Volume6595650.07612126.0

Valuation


HOLD. This stock's P/E ratio indicates a discount compared to an average of 21.96 for the Specialty Retail industry and a significant discount compared to the S&P 500 average of 25.19. Conducting a second comparison, its price-to-book ratio of 3.51 indicates a premium versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 12.35. 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 12.76 Peers 21.96   GPS 5.26 Peers 14.09

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 11.07 Peers 19.56   GPS NM Peers 1.91

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 3.51 Peers 12.35   GPS -32.70 Peers 0.78

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 0.58 Peers 1.48   GPS -4.34 Peers 7.28

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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