Critical Analysis: GAP (NYSE:GAP) and Stage Stores (OTCMKTS:SSINQ)

GAP (NYSE:GAP) and Stage Stores (OTCMKTS:SSINQ) are both retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Insider & Institutional Ownership

58.8% of GAP shares are held by institutional investors. 31.0% of GAP shares are held by insiders. Comparatively, 11.6% of Stage Stores shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares GAP and Stage Stores’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GAP	5.05%	28.89%	6.92%
Stage Stores	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of current ratings and price targets for GAP and Stage Stores, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	0	3	1	0	2.25
Stage Stores	0	0	0	0	0.00

GAP presently has a consensus price target of $27.33, indicating a potential upside of 26.13%. Given GAP’s stronger consensus rating and higher possible upside, equities analysts plainly believe GAP is more favorable than Stage Stores.

Valuation & Earnings

This table compares GAP and Stage Stores”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GAP	$15.17 billion	0.54	$502.00 million	$2.02	10.73
Stage Stores	N/A	N/A	N/A	N/A	N/A

GAP has higher revenue and earnings than Stage Stores.

Summary

GAP beats Stage Stores on 9 of the 9 factors compared between the two stocks.

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.

About Stage Stores

Stage Stores, Inc. operates specialty department stores primarily in small towns and rural communities in the United States. The company sells moderately priced and brand name apparel, accessories, cosmetics, footwear, and home goods through its department stores, off-price stores, and e-commerce Website, as well as through private label credit card and loyalty programs. As of September 17, 2019, it operated 625 BEALLS, GOODY'S, PALAIS ROYAL, PEEBLES, and STAGE specialty department stores; and 158 GORDMANS off-price stores. The company was founded in 1988 and is headquartered in Houston, Texas. On May 10, 2020, Stage Stores, Inc., along with its affiliate, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. The plan was later approved as Chapter 11 liquidation on August 14, 2020.