Gap Inc. (The) Common Stock (GAP)

FairStock Score: 55/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses I can understand, bought at a sensible price, with a margin of safety. Gap is understandable: it sells apparel through Old Navy, Gap, Banana Republic, and Athleta. But retail apparel is brutally competitive, and I see little durable moat because brands matter yet customers can switch easily. The recent numbers are better. In the fiscal quarter ended 2026-08-01 (fiscal Q2 2026), revenue was $3.7B, net income $501M, and diluted EPS $1.38, versus net income $216M and EPS $0.57 in the fiscal quarter ended 2025-08-02. That is a real profit rebound, and FairStock labels the company a TURNAROUND because it returned to profit after a loss within the last three years. Still, in FY2025, the year ended 2026-01-31, net income was $816M on $15.4B revenue, down slightly from FY2024, the year ended 2025-02-01, when net income was $844M on $15.1B, so the annual record is uneven. Financial health is mixed: ROE is high at 33.78%, but D/E is 1.45, ROCE is only 4.78%, and Altman Z is 1.67. At the close on 2026-10-13, price was $22.83. FairStock's P/E is 6.88, EV/EBITDA 5.04, FCF yield 11.9%, and Graham Number $29.00, implying a 21.28% margin of safety. The dividend yield is 3.41%. A 7/9 Piotroski score and 11.9% FCF yield are encouraging, but low ROCE and high beta of 2.06 warn that this is no stalwart. I would want proof that the profit rebound is durable, debt is reduced, and sales grow before calling it a high-quality bargain.

In plain English: Gap Inc. sells clothing and accessories through Old Navy, Gap, Banana Republic, and Athleta in stores and online. The company's profit has jumped in its latest reported quarter, but sales have been roughly flat over the past few years and it uses a lot of debt. At $22.83, the stock looks inexpensive compared with recent profits and cash generation, though the clothing business remains very competitive.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-08-01) · fiscal Q1 2026 10-Q (period ended 2026-05-02) · fiscal Q3 2025 10-Q (period ended 2025-11-01) · fiscal Q2 2025 10-Q (period ended 2025-08-02) · FY2025 10-K (period ended 2026-01-31) · FY2024 10-K (period ended 2025-02-01) · FY2023 10-K (period ended 2024-02-03)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer