GapGAP +0.75%71 Return-on-Tangible-Equity is 37.72% as of Apr. 2026, which is 56% above its 10-year median of 24.22. GuruFocus rates GAP with a GF Score™ of 71/100 and a GF Value™ of $22.54 (Modestly Undervalued). The stock has 3 warning signs investors should review. Among 1,058 Retail - Cyclical companies, Gap ranks better than 78.73% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Gap's annualized net income for the quarter that ended in Apr. 2026 was $1,356 Mil. Gap's average shareholder tangible equity for the quarter that ended in Apr. 2026 was $3,595 Mil. Therefore, Gap's annualized Return-on-Tangible-Equity for the quarter that ended in Apr. 2026 was 37.72%.
The historical rank and industry rank for Gap's Return-on-Tangible-Equity or its related term are showing as below:
GAP'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: -24.05 Med: 24.22 Max: 31.88
Current: 27.34
During the past 13 years, Gap's highest Return-on-Tangible-Equity was 31.88%. The lowest was -24.05%. And the median was 24.22%.
GAP's Return-on-Tangible-Equity is ranked better than 78.73% of 1058
companies
in the Retail - Cyclical industry
Industry Median: 8.4
vs GAP: 27.34
Gap (NYSE:GAP) Return-on-Tangible-Equity Explanation
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
Gap Return-on-Tangible-Equity Related Terms
Gap Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for Gap's Return-on-Tangible-Equity 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: Return-on-Tangible-Equity Comparison
For the Apparel Retail subindustry, Gap's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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 Return-on-Tangible-Equity vs Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Gap's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Gap's Return-on-Tangible-Equity 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 Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Apr. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 37.72% mean?
Gap (GAP) has a Return-on-Tangible-Equity of 37.72% as of Apr. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Gap and its competitors. This is 56% above median its historical median of 24.22. According to the industry distribution chart, Gap ranks #225 out of 1058 companies in the Retail - Cyclical industry, placing it in the top 21.3%.
Is Gap's Return-on-Tangible-Equity too high?
Gap's current Return-on-Tangible-Equity of 37.72% is 56% above median its 10-year median of 24.22. The Retail - Cyclical industry median Return-on-Tangible-Equity is 8.40. Gap's value of 37.72% is 349% above this industry median. Based on the distribution chart, Gap ranks #225 out of 1058 companies in the Retail - Cyclical industry, which is in the top quartile — a strong position relative to peers. Overall, Gap has a GF Score™ of 71/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Gap's Return-on-Tangible-Equity compare to VSXY and URBN?
According to the Retail - Cyclical industry distribution chart, Gap ranks #225 out of 1058 companies for Return-on-Tangible-Equity. This places Gap in the top 21% of its industry — outperforming the majority of peers. The industry median Return-on-Tangible-Equity is 8.40. Gap's value of 37.72% is 349% above this benchmark. While the company's 10-year median is 24.22 vs. the industry median of 8.40, Gap has consistently been above 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 Return-on-Tangible-Equity for a Retail - Cyclical company?
The median Return-on-Tangible-Equity among Retail - Cyclical companies is 8.40, based on 1,058 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Gap's current Return-on-Tangible-Equity of 37.72% is 349% above 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 Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Gap and its competitors. For the Retail - Cyclical industry, the median Return-on-Tangible-Equity is 8.40 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Gap's current Return-on-Tangible-Equity is 37.72%, which is 56% above median its own 10-year median of 24.22. 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 $22.54, compared to a current price of $18.82 — trading 16.5% below its estimated fair value. The current Return-on-Tangible-Equity is 37.72%, which is 56% above median its 10-year median of 24.22 and 349% above the Retail - Cyclical industry median of 8.40. Gap's overall GF Score™ is 71/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Gap (GAP), the current Return-on-Tangible-Equity is 37.72% 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 $18.82 is trading 16.5% below its estimated GF Value™ of $22.54.
GuruFocus considers Gap to be Modestly Undervalued.
Key valuation signals for GAP:
Return-on-Tangible-Equity: 37.72% (56% above median its 10-year median of 24.22)
GF Value™: $22.54 vs. price of $18.82 (16.5% below fair value)
Industry Position: 349% above the Retail - Cyclical median (#225 of 1058)
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.
71GF Score
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