Analyzing GAP (GAP) and The Competition

GAP (NYSE:GAP) is one of 13 publicly-traded companies in the “Family clothing stores” industry, but how does it weigh in compared to its peers? We will compare GAP to similar companies based on the strength of its valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Earnings and Valuation

This table compares GAP and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
GAP	$15.17 billion	$502.00 million	-0.83
GAP Competitors	$12.45 billion	$774.80 million	12.54

GAP has higher revenue, but lower earnings than its peers. GAP is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

GAP pays an annual dividend of $0.60 per share and has a dividend yield of 2.7%. GAP pays out -2.2% of its earnings in the form of a dividend. As a group, “Family clothing stores” companies pay a dividend yield of 1.3% and pay out -191.3% of their earnings in the form of a dividend.

Profitability

This table compares GAP and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GAP	5.05%	28.89%	6.92%
GAP Competitors	4.36%	-452.40%	7.85%

Institutional and Insider Ownership

58.8% of GAP shares are owned by institutional investors. Comparatively, 75.6% of shares of all “Family clothing stores” companies are owned by institutional investors. 31.0% of GAP shares are owned by insiders. Comparatively, 16.2% of shares of all “Family clothing stores” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility and Risk

GAP has a beta of 2.35, indicating that its stock price is 135% more volatile than the S&P 500. Comparatively, GAP’s peers have a beta of 1.77, indicating that their average stock price is 77% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for GAP and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	0	3	0	0	2.00
GAP Competitors	346	2105	2336	30	2.43

GAP currently has a consensus target price of $27.00, indicating a potential upside of 19.95%. As a group, “Family clothing stores” companies have a potential upside of 7.91%. Given GAP’s higher probable upside, research analysts clearly believe GAP is more favorable than its peers.

Summary

GAP peers beat GAP on 8 of the 15 factors compared.

About GAP

The Gap, Inc. operates as an apparel retail company. The company offers apparel, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, and Athleta brands. Its products include adult apparel and accessories; and fitness and lifestyle products for use in yoga, training, sports, travel, and everyday activities for women and girls. The company offers its products through company-operated stores, franchise stores, websites, and third-party arrangements. It has franchise agreements to operate Old Navy, Gap, Banana Republic, and Athleta stores and websites in Asia, Europe, Latin America, the Middle East, and Africa. The Gap, Inc. was incorporated in 1969 and is headquartered in San Francisco, California.