The Gap, Inc. — Apparel Retail. Scored on the same transparent model behind the daily rankings.
★
GAP
The Gap, Inc. · Apparel Retail
FCF$1.1bC+
Rev+1.6%C
D/E1.54C+
P/E8.4xA
PEG1.14B+
59.9Score
$20.79$7.5B
1Y Target$25.58Analyst consensus · 18 analysts
5Y Target$32.29Compound horizon
10Y Target$41.41Long-dated conviction
FCF$1.1bTTMC+
FCF $1.1b — respectable but not differentiating
Rev+1.6%TTM YoYC
Revenue +1.6% — flat, mature phase or headwinds present
D/E1.54C+
D/E 1.54 — above the Consumer Cyclical debt median (≈75th pctile)
P/E8.4xA
P/E 8.4 — cheapest decile in Consumer Cyclical (≈10th pctile)
PEG1.14B+
PEG 1.14 — near fair value, classic Lynch benchmark (1.0)
Forward price target — the 1-year figure is the analyst consensus where the stock is covered; the 5- and 10-year figures compound our earnings estimate from there. The DCF below is a separate cross-check on intrinsic value (what it's worth today), not another target.
Quality-growth score · 59.9
Quality76.4
Growth36.4
Value77.2
Why this score
Buying back stock
Raising its dividend
Entry · Margin of safety
52-week rangeNear 52-week low
29% off the 12-month high
vs DCF fair value32% belowest. fair value ~$31
What the price assumes: free cash flow compounding at ~-4% a year for the next decade — vs the ~9% a year our model projects from current growth and analyst estimates.
Quality signals · context only
Gross profitability51% · Agross profit ÷ total assets (Novy-Marx)
ROIC18.2% · A-return on invested capital — not score-weighted
Model-generatedGenerated by the Bull Rankings model from this company's reported fundamentals, and checked against the figures shown above.
Why now
GAP is a compounder disguised as a value trap: its 26.3% ROE is the highest among apparel peers and is driven by pricing power across Old Navy's family apparel and Athleta's athleisure, where category leadership in kids' wear and women's activewear commands premiums. Free cash flow of $1.1B on a $7.5B market cap implies a 15% FCF yield, yet the stock trades at a P/E of just 8.4x — the gap between cash generation and valuation is the single best reason to own GAP. The crux: management is redirecting FCF into buybacks and dividends, shrinking share count into a growing earnings base while the market still prices in a slow-growth story.
Moat
The moat is multi-brand distribution dominance: Old Navy's scale in value-oriented family apparel and Athleta's leadership in women's athleisure create two distinct customer bases with high switching costs (wardrobe continuity for families, performance fit for athletes). The 1.54 debt-to-equity ratio is manageable because franchise agreements in Asia and Latin America (via licensing partnerships) generate recurring royalty revenue without capital intensity, locking in global distribution without the balance sheet strain of owned stores. ROE of 26.3% is sustained by category-specific pricing power: Old Navy's everyday low pricing in basics and Athleta's premium activewear margins are protected by brand loyalty in segments where private label can't match quality or fit consistency.
Risk
The bear case is a margin meltdown in Old Navy's core family apparel, where revenue growth of just 1.6% YoY masks deflationary pressure from fast fashion competitors and private label incursion. With a debt-to-equity of 1.54 and a beta of 2.05, GAP is a leveraged bet on consumer discretionary that cracks if U.S. discretionary spending rolls over. The signal to bail: a quarter where Old Navy comps turn negative while Banana Republic's luxury shift fails to offset the decline — that would confirm the value thesis is a value trap.
Horizon
1-3 yr $25.58 (18-analyst consensus) — multiple re-rating thesis requires a catalyst. 5 yr $32.29 at ~9% CAGR — dividend + buyback compounding. 10 yr $41.41 if the moat survives secular pressure.
Not investment advice. The Bull Rankings publishes a quantitative ranking model and accompanying analysis for general informational purposes only. Nothing on this page is a recommendation to buy, sell, or hold any security; nothing is personalized to your circumstances, risk tolerance, or tax situation. Investing carries the risk of loss — invest at your own risk and consider consulting a licensed financial professional before acting on anything you read here. See terms and methodology for full disclosures.
GAP vs the Top Picks average
Pillar
GAP
Book avg
Diff
Quality
0.76
0.83
-0.07
Growth
0.36
0.87
-0.50
Value
0.77
0.76
in line
Averaged across the 30 names in today's Top Picks (mean score 81.5). A name can beat these averages and still be absent from the book — it also applies concentration limits.
Score history · GAP
Trend
-0.6 over 49 daily scores
From 60.5 (Jun 22) → 59.9 (now)
One point per daily model run. The range autoscales, so a flat-looking line can still hide 1–2 point moves — read the From → To values for the actual range.
GAP at a glance
Every figure here comes from the same audited fundamentals behind the score. Charts drawn from data the score does not use say so on the card.
Analyst estimate revisions
30-day change
-1.7%
90-day change
-1.7%
Forward EPS estimate
$2.56
Over the last 90 days, what analysts expect GAP to earn is drifting lower (-1.7%). The estimate is derived from price and forward P/E captured at the same instant, so a moving share price does not move this number — only a changed forecast does.
A rising estimate means expectations are improving, not that the price has failed to keep up — and estimates get cut as readily as they get raised. It is not part of the Bull Rankings score. Biggest movers across the market →
Position sizing · GAP
$
%
%
Shares to buy
96
Position size
$1,996
4.0% of portfolio
Stop price
$15.59
25% below $20.79
$ at risk if stopped
$498.96
budget $500.00 · 1% of portfolio
Math only — share count is floor(portfolio × risk% ÷ (price × stop%)). Doesn't account for commissions, slippage, gap risk, or position-correlation across your book. Inputs persist locally; never sent to the server. Not investment advice.
The Gap, Inc. (GAP): score, valuation & FAQ
The Gap, Inc. (GAP) is a Apparel Retail company that scores 59.9 out of 100 on the Bull Rankings quality-growth model — a middling reading. The score blends three pillars — quality (durable returns, healthy margins, low leverage), growth (revenue and earnings), and value (valuation versus sector peers) — into one number, refreshed daily; it is a screen, not a buy recommendation.
Its strongest graded signals are P/E (A) and PEG (B+). On valuation, GAP sits about 32% below our discounted-cash-flow fair value (a margin of safety) — the current price implies roughly -4% annual free-cash-flow growth over the next decade.
Is GAP a good stock to buy?
Bull Rankings scores GAP 59.9 out of 100 on its quality-growth model, which is a middling reading. That is driven by P/E (A) and PEG (B+). A score is a quantitative screen of The Gap, Inc.'s fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.
Why does GAP score 59.9 on Bull Rankings?
The score leans on value at 77.2 out of 100, with growth the weakest pillar at 36.4 — the three combine geometrically, so a weak one cannot be papered over by a strong one. GAP earns its highest marks on P/E (A) and PEG (B+). Each signal is graded against sector-aware thresholds rather than one absolute bar, so GAP is measured against Apparel Retail peers, not against the market as a whole.
Is GAP overvalued or undervalued?
Based on $20.79, GAP sits about 32% below our discounted-cash-flow fair value (a margin of safety) — the current price implies roughly -4% annual free-cash-flow growth over the next decade. It trades at a 8.4x P/E (graded A). Discounted-cash-flow estimates are sensitive to growth and discount-rate assumptions, so treat this as a cross-check, not a price target.
What are the main risks of investing in GAP?
The bear case is a margin meltdown in Old Navy's core family apparel, where revenue growth of just 1.6% YoY masks deflationary pressure from fast fashion competitors and private label incursion. With a debt-to-equity of 1.54 and a beta of 2.05, GAP is a leveraged bet on consumer discretionary that cracks if U.S. discretionary spending rolls over. The signal to bail: a quarter where Old Navy comps turn negative while Banana Republic's luxury shift fails to offset the decline — that would confirm the value thesis is a value trap.
Bull Rankings is an automated fundamentals screen for research and education. It is not investment advice, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a licensed financial advisor.