Gap Inc (GPS, Financial), a renowned retail company specializing in apparel, accessories, and personal-care products, has seen a significant surge in its stock price over the past three months. Despite a 1% decrease over the past week, the company's stock has risen by 23.47% over the past three months, reflecting a strong market performance. The company's GF Value, a measure of intrinsic value defined by GuruFocus.com, currently stands at $13.8, down from $15.12 three months ago. However, the stock's GF Valuation has improved from being significantly undervalued to being fairly valued over the same period.
Company Overview
Gap Inc operates under the Gap, Old Navy, Banana Republic, and Athleta brands, with Old Navy generating more than half of the company's sales. The firm also operates e-commerce sites, outlet stores, and specialty stores under various Gap names. With approximately 2,600 stores in North America, Europe, and Asia, and about 850 more franchises in Asia, Europe, Latin America, and other regions, Gap Inc has a significant global presence. The company was founded in 1969 and is based in San Francisco.
Profitability Analysis
Gap Inc's Profitability Rank stands at 7/10, indicating a high level of profitability. The company's Operating Margin is 1.67%, better than 38.03% of companies in the industry. Its ROE and ROA are 4.67% and 0.94% respectively, better than 46.15% and 41.19% of companies in the industry. The company's ROIC is 1.57%, better than 38.17% of companies in the industry. Over the past decade, Gap Inc has had 8 years of profitability, better than 58.97% of companies in the industry.
Growth Prospects
Despite its strong profitability, Gap Inc's Growth Rank is 1/10, indicating low growth. The company's 3-Year Revenue Growth Rate per Share is -0.60%, better than 36.96% of companies in the industry. Its 5-Year Revenue Growth Rate per Share is 0.60%, better than 44.02% of companies in the industry. However, the company's future total revenue growth rate is -1.76%, better than only 9.88% of companies in the industry.
Major Stock Holders
The top three holders of Gap Inc's stock are Dodge & Cox, Richard Pzena (Trades, Portfolio), and Ken Fisher (Trades, Portfolio). Dodge & Cox holds 37,478,228 shares, representing 10.18% of the company's stock. Richard Pzena (Trades, Portfolio) holds 10,165,235 shares, representing 2.76% of the company's stock. Ken Fisher (Trades, Portfolio) holds 6,053,936 shares, representing 1.64% of the company's stock.
Competitive Landscape
Gap Inc faces competition from American Eagle Outfitters Inc (AEO, Financial), Urban Outfitters Inc (URBN, Financial), and Abercrombie & Fitch Co (ANF, Financial). These companies have market capitalizations of $3.57 billion, $3.18 billion, and $3.18 billion respectively, compared to Gap Inc's market capitalization of $5 billion.
Conclusion
In conclusion, Gap Inc's stock has performed well over the past three months, despite a slight decrease over the past week. The company's profitability is high, and its operating margin, ROE, ROA, and ROIC are all better than a significant percentage of companies in the industry. However, the company's growth prospects are relatively low, and it faces stiff competition from other companies in the industry. Despite these challenges, Gap Inc remains a significant player in the retail industry, with a strong global presence and a diverse range of brands.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
