Recent News
July 29, 2025 — Gap named Maggie Gauger as Athleta President and CEO, effective August 1, accelerating leadership change at the activewear brand. August 28, 2025 — the company reported second-quarter fiscal 2025 results: net sales roughly flat at $3.7 billion, diluted EPS of $0.57, positive comparable sales for the sixth consecutive quarter, and cash plus short-term investments of $2.4 billion. September 4, 2025 — Gap announced a phased rollout into beauty and personal care beginning at 150 Old Navy stores this fall; Gap-branded beauty planned for 2026. Late August 2025 — management highlighted a viral “Better in Denim” campaign that produced hundreds of millions of views and drove engagement for the Gap brand.
Technical Analysis
Directional Indicators (ADX / DI+ / DI-): ADX at 21.2 indicates an emerging trend; DI+ shows a dip-and-reverse, and DI- a peak-and-reverse, both signaling renewed bullish directional pressure that supports upside potential relative to the current valuation.
MACD: MACD sits at -0.14 with a dip-and-reversal pattern and the MACD line above its signal line (-0.24), indicating a bullish momentum shift despite negative absolute MACD, consistent with a turning momentum profile that favors near-term gains.
MRO (Momentum/Regression Oscillator): MRO at -17.05 registers negative, implying price sits below the model target and therefore carries potential upward pressure toward that target.
RSI and Volatility: RSI near 50.19 with a dip-and-reversal reads as neutral-to-constructive momentum, leaving room for upward movement without overbought conditions. 42-day volatility sits at 2%, and 52-week at 4%, suggesting relatively subdued realized volatility compared with many discretionary names.
Price vs. Moving Averages and Bands: Closing price $22.19 trades above the 12-day EMA ($21.33), 20-day average ($21.06), 50-day average ($21.79), and 200-day average ($21.72), aligning short- and long-term averages behind price and reinforcing a bullish bias. Price touches the Bollinger 1x upper band ($21.81) and remains below the 2x upper band ($22.56), indicating the move carries momentum but not extreme extension. Ichimoku lines (Tenkan $21.01, Kijun $21.82, Senkou A $22.02, Senkou B $21.44) place price at or above key cloud components, supporting constructive price positioning.
Volume and Beta: Latest volume (6.55M) sits below 10/50/200-day averages, implying current moves show lighter participation. 42-day beta 1.52 and 52-week beta 1.45 indicate above-market sensitivity if the momentum continues.
Fundamental Analysis
Profitability & Margins: EBIT of $319,000,000 yields an EBIT margin of 8.56%. That margin sits below the industry peer mean (10.82%) and median (12.55%) but above the industry low (-2.67%). Operating margin stands at 7.84% with operating margin QoQ down 5.085 percentage points and YoY down 8.87 percentage points, reflecting near-term margin pressure despite positive absolute profitability.
Revenue & Earnings Trends: Total revenue $3,725,000,000 with revenue growth at 7.57%; revenue growth year-over-year shows -22.79% as reported. Diluted EPS of $0.57 beat the estimate of $0.55 by $0.02, an EPS surprise of 3.64%.
Cash Flow & Liquidity: Operating cash flow $448,000,000 and free cash flow $350,000,000 produce a free cash flow yield of 4.43%, which stands above the industry peer mean (~1.71%) and median (~1.07%). Cash and short-term investments total $2.432 billion and the cash conversion ratio reads 1.709, supporting liquidity. Current ratio 1.68 sits modestly above the industry peer mean (1.51) and median (1.50); quick ratio 0.96 with a slight QoQ decline. Cash strength underpins flexibility for reinvestment and shareholder returns.
Leverage & Returns: Total debt $5.592 billion yields debt-to-assets of 46.04%, modestly above the industry peer mean of ~41.54% and above the median. Debt-to-EBITDA ~12.68 indicates elevated leverage relative to earnings capacity. Return on equity 6.29% sits below the industry peer mean (7.10%) and median (9.45%). Interest coverage remains healthy at 13.87x.
Other Operational Metrics: Gross margin 41.24% (down 310 bps YoY), inventory at $2.294 billion with days inventory outstanding ~99.4, and inventory turnover ~1.00. Asset turnover 0.314 is slightly below the industry peer mean (~0.325) and median (~0.345), indicating scope to enhance sales efficiency on the existing asset base.
Valuation Snapshot: Price-to-earnings at 37.25 and forward P/E ~42.62; price-to-book ~2.30 (below the industry peer mean ~3.90 and median ~4.95). Enterprise multiple ~25.10. The current valuation as determined by WMDST classifies the stock as under-valued.
MOST-RECENT QUARTERLY REPORT
| REPORT PERIOD ENDING: | 2025-07-31 |
| REPORT DATE: | 2025-08-28 |
| NEXT REPORT DATE: | 2025-11-26 |
| CASH FLOW | Begin Period Cash Flow | $ 2.0 B |
| Operating Cash Flow | $ 448.0 M | |
| Capital Expenditures | $ -98.00 M | |
| Change In Working Capital | $ 17.0 M | |
| Dividends Paid | $ -62.00 M | |
| Cash Flow Delta | $ 218.0 M | |
| End Period Cash Flow | $ 2.2 B | |
| INCOME STATEMENT | REVENUE | |
| Total Revenue | $ 3.7 B | |
| Forward Revenue | $ 815.7 M | |
| COSTS | ||
| Cost Of Revenue | $ 2.2 B | |
| Depreciation | $ 122.0 M | |
| Depreciation and Amortization | $ 122.0 M | |
| Research and Development | — | |
| Total Operating Expenses | $ 3.4 B | |
| PROFITABILITY | ||
| Gross Profit | $ 1.5 B | |
| EBITDA | $ 441.0 M | |
| EBIT | $ 319.0 M | |
| Operating Income | $ 292.0 M | |
| Interest Income | $ 27.0 M | |
| Interest Expense | $ 23.0 M | |
| Net Interest Income | $ 4.0 M | |
| Income Before Tax | $ 296.0 M | |
| Tax Provision | $ 80.0 M | |
| Tax Rate | 27.0 % | |
| Net Income | $ 216.0 M | |
| Net Income From Continuing Operations | $ 216.0 M | |
| EARNINGS | ||
| EPS Estimate | $ 0.55 | |
| EPS Actual | $ 0.57 | |
| EPS Difference | $ 0.02 | |
| EPS Surprise | 3.636 % | |
| Forward EPS | $ 0.51 | |
| BALANCE SHEET | ASSETS | |
| Total Assets | $ 12.1 B | |
| Intangible Assets | — | |
| Net Tangible Assets | $ 3.4 B | |
| Total Current Assets | $ 5.4 B | |
| Cash and Short-Term Investments | $ 2.4 B | |
| Cash | $ 2.2 B | |
| Net Receivables | — | |
| Inventory | $ 2.3 B | |
| Long-Term Investments | $ 894.0 M | |
| LIABILITIES | ||
| Accounts Payable | $ 1.7 B | |
| Short-Term Debt | — | |
| Total Current Liabilities | $ 3.2 B | |
| Net Debt | — | |
| Total Debt | $ 5.6 B | |
| Total Liabilities | $ 8.7 B | |
| EQUITY | ||
| Total Equity | $ 3.4 B | |
| Retained Earnings | $ 3.3 B | |
| VALUATION & PER-SHARE METRICS | EQUITY & PER-SHARE METRICS | |
| Book Value Per-Share | $ 9.25 | |
| Shares Outstanding | 371.000 M | |
| Revenue Per-Share | $ 10.04 | |
| VALUATION | Market Capitalization | $ 7.9 B |
| Enterprise Value | $ 11.1 B | |
| Enterprise Multiple | 25.096 | |
| Enterprise Multiple QoQ | -14.482 % | |
| Enterprise Multiple YoY | 58.399 % | |
| Enterprise Multiple IPRWA | high: 105.517 median: 57.079 mean: 50.843 GAP: 25.096 low: -11.538 |
|
| EV/R | 2.971 | |
| CAPITAL STRUCTURE | ||
| Asset To Equity | 3.538 | |
| Asset To Liability | 1.394 | |
| Debt To Capital | 0.62 | |
| Debt To Assets | 0.46 | |
| Debt To Assets QoQ | -2.943 % | |
| Debt To Assets YoY | 764.439 % | |
| Debt To Assets IPRWA | high: 1.051 GAP: 0.46 mean: 0.415 median: 0.345 low: 0.22 |
|
| Debt To Equity | 1.629 | |
| Debt To Equity QoQ | -1.393 % | |
| Debt To Equity YoY | 670.858 % | |
| Debt To Equity IPRWA | high: 4.701 GAP: 1.629 mean: 1.174 median: 0.879 low: -2.166 |
|
| PRICE-BASED VALUATION | ||
| Price To Book (P/B) | 2.303 | |
| Price To Book QoQ | -11.851 % | |
| Price To Book YoY | -21.864 % | |
| Price To Book IPRWA | high: 8.446 median: 4.947 mean: 3.901 GAP: 2.303 low: -4.028 |
|
| Price To Earnings (P/E) | 37.253 | |
| Price To Earnings QoQ | -18.116 % | |
| Price To Earnings YoY | -11.55 % | |
| Price To Earnings IPRWA | high: 151.774 median: 74.652 mean: 66.775 GAP: 37.253 low: -89.111 |
|
| PE/G Ratio | 3.166 | |
| Price To Sales (P/S) | 2.123 | |
| Price To Sales QoQ | -15.288 % | |
| Price To Sales YoY | -7.66 % | |
| Price To Sales IPRWA | high: 10.893 mean: 4.712 median: 4.295 GAP: 2.123 low: 0.22 |
|
| FORWARD MULTIPLES | ||
| Forward P/E | 42.617 | |
| Forward PE/G | 3.622 | |
| Forward P/S | 9.693 | |
| EFFICIENCY | OPERATIONAL | |
| Operating Leverage | 1.525 | |
| ASSET & SALES | ||
| Asset Turnover Ratio | 0.314 | |
| Asset Turnover Ratio QoQ | 6.382 % | |
| Asset Turnover Ratio YoY | -5.33 % | |
| Asset Turnover Ratio IPRWA | high: 0.608 median: 0.345 mean: 0.325 GAP: 0.314 low: 0.109 |
|
| Receivables Turnover | — | |
| Receivables Turnover Ratio QoQ | — | |
| Receivables Turnover Ratio YoY | — | |
| Receivables Turnover Ratio IPRWA | — | |
| Inventory Turnover | 0.997 | |
| Inventory Turnover Ratio QoQ | 3.019 % | |
| Inventory Turnover Ratio YoY | -5.312 % | |
| Inventory Turnover Ratio IPRWA | high: 1.735 GAP: 0.997 mean: 0.966 median: 0.749 low: 0.364 |
|
| Days Sales Outstanding (DSO) | — | |
| CASH CYCLE | ||
| Cash Conversion Cycle Days (CCC) | — | |
| Cash Conversion Cycle Days QoQ | — | |
| Cash Conversion Cycle Days YoY | — | |
| Cash Conversion Cycle Days IPRWA | — | |
| CAPITAL DEPLOYMENT | ||
| Cash Conversion Ratio | 1.709 | |
| CapEx To Revenue | -0.026 | |
| CapEx To Depreciation | -0.803 | |
| CAPITAL, LIQUIDITY & COVERAGE | CAPITAL STRUCTURE | |
| Total Capital | $ 4.9 B | |
| Net Invested Capital | $ 4.9 B | |
| Invested Capital | $ 4.9 B | |
| Net Tangible Assets | $ 3.4 B | |
| Net Working Capital | $ 2.2 B | |
| LIQUIDITY | ||
| Cash Ratio | 0.761 | |
| Current Ratio | 1.682 | |
| Current Ratio QoQ | -1.717 % | |
| Current Ratio YoY | 12.755 % | |
| Current Ratio IPRWA | high: 2.461 GAP: 1.682 mean: 1.512 median: 1.503 low: 0.784 |
|
| Quick Ratio | 0.964 | |
| Quick Ratio QoQ | -1.247 % | |
| Quick Ratio YoY | 15.064 % | |
| Quick Ratio IPRWA | high: 1.528 GAP: 0.964 mean: 0.568 median: 0.554 low: 0.063 |
|
| COVERAGE & LEVERAGE | ||
| Debt To EBITDA | 12.68 | |
| Cost Of Debt | 0.303 % | |
| Interest Coverage Ratio | 13.87 | |
| Interest Coverage Ratio QoQ | 11.539 % | |
| Interest Coverage Ratio YoY | 4.022 % | |
| Interest Coverage Ratio IPRWA | high: 52.0 median: 19.258 mean: 16.969 GAP: 13.87 low: -12.777 |
|
| Operating Cash Flow Ratio | 0.158 | |
| TIMING / LIQUIDITY | ||
| Days Payables Outstanding (DPO) | 66.751 | |
| DIVIDENDS | ||
| Dividend Coverage Ratio | 3.484 | |
| Dividend Payout Ratio | 0.287 | |
| Dividend Rate | $ 0.17 | |
| Dividend Yield | 0.008 | |
| PERFORMANCE | GROWTH | |
| Asset Growth Rate | 5.024 % | |
| Revenue Growth | 7.566 % | |
| Revenue Growth QoQ | -145.76 % | |
| Revenue Growth YoY | -22.788 % | |
| Revenue Growth IPRWA | high: 40.558 % mean: 7.915 % median: 7.654 % GAP: 7.566 % low: -12.613 % |
|
| Earnings Growth | 11.765 % | |
| Earnings Growth QoQ | -311.753 % | |
| Earnings Growth YoY | -62.895 % | |
| Earnings Growth IPRWA | high: 285.714 % mean: 18.26 % GAP: 11.765 % median: 8.108 % low: -225.0 % |
|
| MARGINS | ||
| Gross Margin | 41.235 % | |
| Gross Margin QoQ | -1.382 % | |
| Gross Margin YoY | -3.1 % | |
| Gross Margin IPRWA | high: 68.419 % GAP: 41.235 % median: 38.558 % mean: 36.752 % low: 10.882 % |
|
| EBIT Margin | 8.564 % | |
| EBIT Margin QoQ | 3.693 % | |
| EBIT Margin YoY | -0.442 % | |
| EBIT Margin IPRWA | high: 18.428 % median: 12.55 % mean: 10.819 % GAP: 8.564 % low: -2.672 % |
|
| Return On Sales (ROS) | 7.839 % | |
| Return On Sales QoQ | -5.085 % | |
| Return On Sales YoY | -8.87 % | |
| Return On Sales IPRWA | high: 18.428 % median: 12.55 % mean: 10.375 % GAP: 7.839 % low: -3.764 % |
|
| CASH FLOW | ||
| Free Cash Flow (FCF) | $ 350.0 M | |
| Free Cash Flow Yield | 4.426 % | |
| Free Cash Flow Yield QoQ | -272.218 % | |
| Free Cash Flow Yield YoY | -17.717 % | |
| Free Cash Flow Yield IPRWA | high: 7.329 % GAP: 4.426 % mean: 1.714 % median: 1.07 % low: -2.178 % |
|
| Free Cash Growth | -256.951 % | |
| Free Cash Growth QoQ | 77.588 % | |
| Free Cash Growth YoY | -69.048 % | |
| Free Cash Growth IPRWA | high: 535.911 % mean: -84.907 % median: -86.123 % GAP: -256.951 % low: -534.848 % |
|
| Free Cash To Net Income | 1.62 | |
| Cash Flow Margin | 13.557 % | |
| Cash Flow To Earnings | 2.338 | |
| VALUE & RETURNS | ||
| Economic Value Added | $ 0.03 | |
| Return On Assets (ROA) | 1.822 % | |
| Return On Assets QoQ | 10.693 % | |
| Return On Assets YoY | -0.871 % | |
| Return On Assets IPRWA | high: 4.767 % median: 3.611 % mean: 2.774 % GAP: 1.822 % low: -1.307 % |
|
| Return On Capital Employed (ROCE) | 3.565 % | |
| Return On Equity (ROE) | 0.063 | |
| Return On Equity QoQ | 8.259 % | |
| Return On Equity YoY | -11.393 % | |
| Return On Equity IPRWA | high: 0.115 median: 0.095 mean: 0.071 GAP: 0.063 low: -0.041 |
|
| DuPont ROE | 6.397 % | |
| Return On Invested Capital (ROIC) | 4.729 % | |
| Return On Invested Capital QoQ | 8.389 % | |
| Return On Invested Capital YoY | -132.551 % | |
| Return On Invested Capital IPRWA | high: 11.206 % median: 8.13 % mean: 6.391 % GAP: 4.729 % low: -1.999 % |
|