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GapGAP -0.73%72 Debt-to-EBITDA is 2.35 as of Apr. 2026, which is 27% below its 10-year median of 3.22. GuruFocus rates GAP with a GF Score™ of 72/100 and a GF Value™ of $22.49 (Modestly Undervalued). The stock has 2 warning signs investors should review. Among 901 Retail - Cyclical companies, Gap ranks worse than 58.38% on this metric.
Debt-to-EBITDA measures a company's ability to pay off its debt.
A high Debt-to-EBITDA ratio generally means that a company may spend more time to paying off its debt. According to Joel Tillinghast's BIG MONEY THINKS SMALL: Biases, Blind Spots, and Smarter Investing, a ratio of Debt-to-EBITDA exceeding four is usually considered scary unless tangible assets cover the debt.
The historical rank and industry rank for Gap's Debt-to-EBITDA or its related term are showing as below:
GAP'
s Debt-to-EBITDA Range Over the Past 10 Years
Min: -19.02 Med: 3.22 Max: 12.31
Current: 2.95
During the past 13 years, the highest Debt-to-EBITDA Ratio of Gap was 12.31. The lowest was -19.02. And the median was 3.22.
GAP's Debt-to-EBITDA is ranked worse than 58.38% of 901
companies
in the Retail - Cyclical industry
Industry Median: 2.4
vs GAP: 2.95
A high Debt-to-EBITDA ratio generally means that a company may spend more time to paying off its debt.
According to Joel Tillinghast's BIG MONEY THINKS SMALL: Biases, Blind Spots, and Smarter Investing, a ratio of Debt-to-EBITDA exceeding four is usually considered scary unless tangible assets cover the debt.
Gap Debt-to-EBITDA Related Terms
Gap Debt-to-EBITDA Historical Data
* Premium members only.
The historical data trend for Gap's Debt-to-EBITDA can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
GAP vs VSXY, URBN, BOOT: Debt-to-EBITDA Comparison
For the Apparel Retail subindustry, Gap's Debt-to-EBITDA, along with its competitors' market caps and Debt-to-EBITDA data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Gap Debt-to-EBITDA vs Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Gap's Debt-to-EBITDA distribution charts can be found below:
* The bar in red indicates where Gap's Debt-to-EBITDA falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual Debt-to-EBITDA, the EBITDA of the last fiscal year is used. In calculating the annualized quarterly data,
the EBITDA data used here is four times the quarterly (Apr. 2026) EBITDA data.
Gap (GAP) has a Debt-to-EBITDA of 2.35 as of Apr. 2026. Debt-to-EBITDA ratio represents the ratio of total debt to total earnings before interest, taxes, depreciation and amortization. View historical data on Gap. This is 27% below median its historical median of 3.22. According to the industry distribution chart, Gap ranks #526 out of 901 companies in the Retail - Cyclical industry, placing it in the top 58.4%.
Is Gap's Debt-to-EBITDA too high?
Gap's current Debt-to-EBITDA of 2.35 is 27% below median its 10-year median of 3.22. The Retail - Cyclical industry median Debt-to-EBITDA is 2.40. Gap's value of 2.35 is 2.1% below this industry median. Based on the distribution chart, Gap ranks #526 out of 901 companies in the Retail - Cyclical industry, which is below the industry midpoint. Overall, Gap has a GF Score™ of 72/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Gap's Debt-to-EBITDA compare to VSXY and URBN?
According to the Retail - Cyclical industry distribution chart, Gap ranks #526 out of 901 companies for Debt-to-EBITDA. This places Gap in the lower half of its industry. The industry median Debt-to-EBITDA is 2.40. Gap's value of 2.35 is 2.1% below this benchmark. While the company's 10-year median is 3.22 vs. the industry median of 2.40, Gap has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Debt-to-EBITDA for a Retail - Cyclical company?
The median Debt-to-EBITDA among Retail - Cyclical companies is 2.40, based on 901 companies in the industry. Companies in the top quartile (top 25%) have a Debt-to-EBITDA significantly above this median, while those in the bottom quartile fall well below. However, Debt-to-EBITDA should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Gap's current Debt-to-EBITDA of 2.35 is 2.1% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Debt-to-EBITDA mean?
A high Debt-to-EBITDA can signal that a stock is expensive relative to its fundamentals. Debt-to-EBITDA ratio represents the ratio of total debt to total earnings before interest, taxes, depreciation and amortization. View historical data on Gap. For the Retail - Cyclical industry, the median Debt-to-EBITDA is 2.40 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Gap's current Debt-to-EBITDA is 2.35, which is 27% below median its own 10-year median of 3.22. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Gap stock overvalued right now?
Based on GuruFocus' analysis, Gap (GAP) is currently considered Modestly Undervalued. The stock's GF Value™ is $22.49, compared to a current price of $20.35 — trading 9.5% below its estimated fair value. The current Debt-to-EBITDA is 2.35, which is 27% below median its 10-year median of 3.22 and 2.1% below the Retail - Cyclical industry median of 2.40. Gap's overall GF Score™ is 72/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Debt-to-EBITDA calculated?
Debt-to-EBITDA is calculated from a company's financial statements. For Gap (GAP), the current Debt-to-EBITDA is 2.35 as of Apr. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Gap (GAP) Overvalued in 2026?
Based on GuruFocus' analysis, Gap stock appears to be undervalued.
The current stock price of $20.35 is trading 9.5% below its estimated GF Value™ of $22.49.
GuruFocus considers Gap to be Modestly Undervalued.
Key valuation signals for GAP:
Debt-to-EBITDA: 2.35 (27% below median its 10-year median of 3.22)
GF Value™: $22.49 vs. price of $20.35 (9.5% below fair value)
Industry Position: 2.1% below the Retail - Cyclical median (#526 of 901)
No single metric tells the full story. See the GAP stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Gap retails apparel, accessories, footwear, and personal-care products under the Gap, Old Navy, Banana Republic, and Athleta brands. Old Navy generates more than half of Gap's sales. The firm also operates e-commerce sites, outlet stores, and specialty stores under various Gap names. Gap operates approximately 2,500 stores in North America, Europe, and Asia and franchises about 1,000 more in Asia, Europe, Latin America, and other regions. Gap was founded in 1969 and is based in San Francisco.
72GF Score
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