Gap Inc (GPS, Financial), a leading player in the cyclical retail industry, has seen a significant uptick in its stock performance over the past three months. With a current market cap of $4.01 billion and a stock price of $10.83, the company has witnessed a 32.20% increase in its stock price from $9.13 three months ago. Over the past week alone, the stock price has seen a gain of 13.27%. This impressive performance is reflected in the company's GF Value, which stands at $14.3, indicating that the stock is modestly undervalued. This is a significant improvement from three months ago when the GF Value was $15.35, and the stock was significantly undervalued.
Company Overview: Gap Inc
Gap Inc, founded in 1969 and based in San Francisco, is a renowned retailer of apparel, accessories, and personal-care products. The company operates under the Gap, Old Navy, Banana Republic, and Athleta brands, with Old Navy generating more than half of Gap's sales. The firm operates approximately 2,600 stores in North America, Europe, and Asia and franchises about 850 more in Asia, Europe, Latin America, and other regions. Gap also operates e-commerce sites, outlet stores, and specialty stores under various Gap names, making it a significant player in the retail - cyclical industry.
Profitability Analysis
Gap Inc's profitability is commendable, with a Profitability Rank of 7/10, indicating a strong likelihood of the company's business remaining profitable. The company's operating margin stands at 1.67%, better than 38.59% of 1096 companies in the same industry. The ROE, ROA, and ROIC, which stand at 4.67%, 0.94%, and 1.57% respectively, are also better than a significant percentage of companies in the industry. Furthermore, Gap Inc has maintained profitability for 8 out of the past 10 years, better than 58.68% of 1048 companies.
Growth Prospects
Despite a Growth Rank of 2/10, Gap Inc has shown some positive signs in terms of revenue growth. The company's 3-year and 5-year revenue growth rate per share stand at -0.60% and 0.60% respectively, better than a significant percentage of companies in the industry. However, the company's future total revenue growth rate is estimated to be -1.37%, which is better than only 12.3% of 244 companies.
Major Stock Holders
Dodge & Cox is the largest holder of Gap Inc's stock, holding 37,478,228 shares, which constitutes 10.18% of the company's stock. Richard Pzena (Trades, Portfolio) and Ken Fisher (Trades, Portfolio) follow, holding 10,165,235 (2.76%) and 6,053,936 (1.64%) shares respectively.
Competitive Landscape
Gap Inc operates in a highly competitive industry, with American Eagle Outfitters Inc (AEO, Financial), Urban Outfitters Inc (URBN, Financial), and Boot Barn Holdings Inc (BOOT, Financial) being its top competitors. These companies have market caps of $3.29 billion, $3.07 billion, and $2.67 billion respectively, making them close competitors to Gap Inc in terms of market capitalization.
Conclusion
In conclusion, Gap Inc's impressive stock performance, solid profitability, and competitive position in the industry make it a company to watch. Despite some concerns regarding its growth prospects, the company's strong profitability and undervalued stock suggest potential for future gains. Investors should keep a close eye on this stock as it continues to navigate the dynamic retail - cyclical industry.
