# The Gap Inc. (GAP) fundamentals

Data as of 2026-09-08. NYSE, United States. Sector: Consumer Cyclical / Textiles, Apparel & Luxury Goods. Price $22.43, market value $7.9 billion.

## Valuation
- **P/E (trailing): 6.8×** (5-yr avg 14.8×, 3-yr avg 12.4×). The Gap Inc. trades at 6.8× trailing earnings, well below its own five-year average of 14.8×: cheap by its own standards. The Consumer Cyclical median in the September 2026 study was 19.5×. Forward P/E is 8.5×, higher than trailing, so analysts expect earnings to fall.
- **Price / sales: 0.5×**. Each dollar of revenue is priced at 0.5×, a low multiple typical of thin-margin businesses or out-of-favour stocks.
- **Price / book: 2.0×**. The shares trade at 2.0× book value; book value is a meaningful part of the valuation.
- **EV / EBITDA: 3.1×**. Enterprise value is 3.1× operating earnings before depreciation, the multiple that ignores how the company is financed; below 8× is inexpensive for most sectors.
- **Free-cash-flow yield: 12.1%** (5-yr avg 7.2%). Free cash flow equals 12.1% of the market value, above its five-year average of 7.2%, so the shares are cheaper on cash than they have usually been. Above 5% is generally attractive.
- **Earnings yield: 14.8%**. The inverse of the P/E: 14.8% of the price is earned each year.

## Profitability
- **Gross margin: 43.3%**. The Gap Inc. keeps 43.3% of revenue after the direct cost of what it sells.
- **Operating margin: 11.0%**. 11.0% of revenue is left after running the business.
- **Net margin: 5.3%**. 5.3% of each dollar of sales reaches the bottom line.
- **Return on equity: 21.5%**. 21.5% on shareholders' equity is excellent if it is not driven by leverage; sustained above 20% usually signals a competitive advantage.
- **Return on invested capital: 49.7%**. Return on all capital, debt included, is 49.7%: comfortably above what that capital costs.
- **Return on assets: 9.9%**. Each dollar of assets produces 9.9% of profit.

## Growth
- **Revenue growth (1 yr): 1.9%** (3-yr -0.5%/yr, 5-yr 2.2%/yr). Revenue grew 1.9% over the last year, against 2.2% a year compounded over five years.
- **EPS growth (1 yr): -3.2%**. Earnings per share fell 3.2%, slower than revenue, so margins compressed.

## Financial health
- **Debt to equity: 0.39**. Debt is 0.39 times equity: a conservative balance sheet.
- **Net debt / EBITDA: net cash**. The Gap Inc. holds more cash than debt.
- **Piotroski F-score: 5/9**. 5 of 9 checks pass: mixed.

## Dividends
- **Dividend yield: 3.12%** ($0.68 per share, trailing). The Gap Inc. yields 3.12%, a modest yield more typical of a growth-oriented payer.
- **Payout ratio: 30%** (26% of free cash flow). 30% of earnings goes out as dividends, leaving room to keep raising it.
- **Consecutive years of increases: 5**. 5 straight years of increases.
- **Dividend growth (5 yr): 21.6%/yr** (1-yr 7.5%). The dividend has compounded at 21.6% a year over five years, doubling roughly every 3 years at that pace.

## Analyst view
- **Analyst consensus: buy** (18 analysts). 18 analysts cover The Gap Inc.; the consensus is buy, with an average price target of $26.69 (+19% from the current price). Analyst opinion is shown for context; it is not part of the Fundamental Score.

## Price and momentum
- **Total return (1 yr): -3.4%** (YTD -10.4%, 3-mo 5.0%). The shares are down 3.4% over twelve months including dividends.
- **From 52-week high: -23.6%** (23.9% above the low). Trading 24% below its 52-week high.
- **200-day average: below**. The price sits below its 200-day moving average, the usual definition of a downtrend.
- **RSI (14-day): 61**. An RSI of 61 is neutral.
- **Beta (1 yr): 1.20** (volatility 47%). Beta of 1.20 against the S&P 500: the shares move roughly with the market.

Live score and charts: https://foliofundamentals.com/analyzer?s=GAP · Page: https://foliofundamentals.com/stocks/gap

Not investment advice.