Gap Stock Analysis, Valuation (NYSE:GPS)

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$28.44 $1.11 (3.76%) GPS stock closing price Apr 20, 2018 (Closing)
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Gap
Updated on : Apr 20, 2018
previous close
GPS 28.4 (0%)
S&P 500 2670.1 (0%)
Closing Price On: Apr 20, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Retail-Apparel-Shoe
Sector :
Retail-Wholesale
5 Quarter Revenue
Revenue Growth
2018-Q4
$billion
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
0.3%
Operating Profit
Operating Margin:
9.3%
Sector Average:
5.5%
5 Quarter Net Profit
Net Margins
2018-Q4
%
LTM Margin
Compared to the industry
Cash Flow
Operating cash flow:
$780M
Net Income:
$205M
Dividend Yield
GPS dividend yield:
3.23%
PROS      CONS
Operating Margins
Net Margins
Cash Flow
ROIC
ROE
FCF Margin
Long Term Growth
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
GPS PS :
0.7
Industry PS :
0.7
Sector:   Retail-Wholesale.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
24%
Return on Equity:
28.5%
Free Cash Flow Margin:
10.7%
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Gap Stock Analysis

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Watch the robo advisor video of Gap stock analysis on Amigobulls. This video puts forward our latest analysis highlighting the pros and cons for GPS stock.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

Gap Inc Stock Rating 3.9/5

Amigobulls GPS stock analysis uses latest quarter 2018 Q4 financial data like Gap revenue growth, profit margins and cash flows. Gap valuation analysis is based on relative valuation multiples like PE ratio and price to sales ratio. Based on a company's historical fundamentals we arrive at Gap stock rating which is indicative of the company's financial performance.

Should you buy GPS stock?

  • Gap had a healthy average operating margin of 9.3% over the last 4 quarters.
  • Net margins came in at average 5.3% for Gap over the last twelve months.
  • The company has an operating cash flow which is 3.8 times the net income. We see this as a positive signal.
  • GPS stock is trading at an earnings multiple of 13.4 which is better than the industry average of 19.9.
  • Gap has an attractive ROIC (Return on Invested Capital) of 24%
  • Gap has a good Return On Equity (ROE) of 28.5%.
  • The company has a good Free Cash Flow (FCF) margin of 10.7%.

Should you sell GPS stock?

  • Long term revenue growth of 0.3% over the past 5 years has been disappointing.

Comments on this video and Gap stock

Amigobulls Gap stock analysis helps investors in understanding how the company's fundamentals have performed in the last few quarters. Company's fundamentals remain one of the key driver of GPS stock and helps investors in making good buy and sell decision.

While doing a study of the company financials, Gap revenue growth and profit or net income are two main metrics which help in identifying whether GPS stock is overvalued or undervalued. One can also combine technical analysis and fundamental analysis to get a holistic picture about GPS stock.