Gap GAP
United StatesConsumer Cyclical · Apparel RetailUSD
26.51 USD (+12.3%)
19 analysts
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Gap Inc. is an apparel and accessories retailer operating brands such as Old Navy, Gap, Banana Republic, and Athleta, selling through physical stores and its e-commerce platform.
Key points
from its scores- ✓Attractive valuation7.7
- ✕Unfavourable risk and backdrop2.0
- !Weak share-price trend5.0
- !Average business quality5.6
AI analysis
bottom line, main risk, context and newsThe valuation is attractive, but negative revenue growth and a low operating margin limit the potential for near-term re-rating.
Gap trades at a P/E of 7.11 and a forward P/E of 8.96, reflecting an attractive valuation, but revenue growth is negative (-2.0%) and the operating margin is low (6.71%). The ROE of 33.78% is solid, but cash flow conversion is weak (16.78%). Financial health is moderate (Net Debt/EBITDA of 2.2x) and momentum is neutral (11.66%).
The main risk is weak revenue growth (-2.0%) and a low operating margin (6.71%), which could indicate a loss of competitiveness in a highly competitive apparel retail sector.
Context and risks
No relevant recent news and no material exposure to current macro factors. The rise in long-term US rates is a contextual factor, but with Net Debt/EBITDA of 2.2x and a P/E of 7.1, the impact on valuation and financial health is limited and already reflected in the quantitative metrics. The apparel retail business has no direct and material exposure to oil, gas, or conflict-affected shipping routes.
Is Gap stock cheap or expensive?
at the analysis dateOn P/E and EV / EBITDA, it trades 45% below the Consumer Cyclical median on average.
| Multiple | Company | Sector | Difference |
|---|---|---|---|
| P/E | 7.1 | 17.8 | −60% |
| EV / EBITDA | 7.9 | 11.2 | −30% |
| Price / book | 2.1 | 2.9 | −27% |
| Price / sales | 0.5 | 1.3 | −57% |
Sector: median of the 228 Consumer Cyclical companies analysed. In bold, the multiples used for the comparison.
Valuation score: 7.7 out of 10 (median for Consumer Cyclical: 6.6).
Average analyst target: 26.51 USD, +12.3% versus the price.
A discount may reflect more risk or slower growth than its sector: Financial health 5.7 (sector 5.7), Growth 6.8 (sector 5.9).
Classic formulas with standard assumptions (0.0% growth, 8-9% discount rate). Indicative only: they change a lot with the assumptions and are not a recommendation.
Work out its fair value yourself →How much would you have made investing every month? →
Comparing it with its sector does not say whether it is a good buy: this is not investment advice.
Score by category
0 to 10 · hover overtap each one to see what it measuresKey metrics
at the analysis date · compared with the Consumer Cyclical medianValuation
- P/E
- 7.1
- Forward P/E
- 9.0
- EV / EBITDA
- 7.9
- Price / book
- 2.1
- Price / sales
- 0.5
- PEG
- 1.19
- Market cap
- 8.3B USD
- Enterprise value
- 11.5B USD
Profitability
- ROE
- 33.8%
- ROA
- 4.8%
- ROIC (approx.)
- 10.6%
- Gross margin
- 40.5%
- Operating margin
- 6.7%
- Net margin
- 8.1%
- Free cash flow
- 246.4M USD
- FCF yield
- 3.0%
- Cash conversion
- 17%
Solvency
- Total debt
- 5.7B USD
- Net debt
- 3.2B USD
- Cash
- 2.5B USD
- EBITDA
- 1.5B USD
- Net debt / EBITDA
- 2.20
- Debt / equity
- 144.77
- Current ratio
- 1.82
- Quick ratio
- 0.77
Growth
- Revenue growth
- −2.0%
- Earnings growth
- +142.1%
- EPS (TTM)
- 3.32 USD
- EPS (forward)
- 2.64 USD
Dividend
- Dividend yield
- 3.0%
- Payout
- 20.5%
Risk and market
- Beta
- 2.03
- Analyst consensus
- Buy (19)
- Target price
- 26.51 USD
- 52-week range
- 18.11 – 29.36
Recent news
All GAP news →Compare it with its sector
All 228 in Consumer Cyclical →Frequently asked questions about Gap
Is Gap stock cheap or expensive?
On P/E and EV / EBITDA, it trades 45% below the Consumer Cyclical median on average. Valuation score: 7.7 out of 10 (median for Consumer Cyclical: 6.6). Average analyst target: 26.51 USD, +12.3% versus the price. This is not investment advice.
What score does Gap get on MeridIAn Screener?
It scores 5.7 out of 10, rank 1,244 of 2,130 (better than 39% of the companies analysed). Its strongest category is Valuation (7.7) and its weakest, Risk & Context (2.0). Analysis of 08/10/2026.
What is Gap's P/E ratio?
Its P/E is 7.1: the share price equals 7.1 times earnings per share over the last 12 months. The Consumer Cyclical median is 17.8. Based on the earnings analysts expect, the forward P/E is 9.0.
How much is Gap worth on the stock market?
Its market capitalisation is 8.3B USD and its enterprise value, debt included, is 11.5B USD.
How much debt does Gap have?
Its net debt (debt minus cash) is 3.2B USD. That is 2.20 times its EBITDA; the Consumer Cyclical median is 1.91.
Does Gap pay a dividend?
Yes: its dividend yield is 2.96% and it pays out 20% of its earnings.
How has Gap stock performed over the last year?
It has risen 23.5% over the last year, excluding dividends. Over the last 52 weeks it has traded between 18.11 and 29.36 USD. Past performance does not guarantee future results.
What do analysts think of Gap?
19 analysts cover it; their average recommendation is “Buy” and their average target is 26.51 USD (+12.3% versus the price). It is an estimate, not market data.