The Gap, Inc. (GAP) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

+160.1%

$57.60

vs $22.15 price

Levered DCF

$48.97

After debt service

Piotroski score

7 / 9

Strong

Altman Z-score

2.72

Grey zone

Rating

Overall 4 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	12.83×	10.75×	13.74×	-24.67×	26.57×	-11.31×	18.72×	9.75×
P/B	2.75×	2.77×	2.66×	2.23×	2.5×	2.88×	1.97×	2.76×
P/S	0.68×	0.6×	0.46×	0.32×	0.41×	0.55×	0.4×	0.59×
EV / EBITDA	8.14×	7.07×	8.98×	19.99×	12.24×	-32.75×	11.08×	5.05×
Gross margin	40.8%	41.3%	38.8%	34.3%	39.8%	34.1%	37.4%	38.1%
Operating margin	7.3%	7.4%	3.8%	-0.4%	4.9%	-6.2%	3.5%	8.2%
Net margin	5.3%	5.6%	3.4%	-1.3%	1.5%	-4.8%	2.1%	6.0%
Current ratio	1.75×	1.6×	1.42×	1.42×	1.27×	1.55×	1.41×	1.96×
Debt / equity	1.48×	1.68×	2.1×	2.7×	2.3×	2.93×	2.32×	0.35×
Interest coverage	48.48×	12.78×	6.22×	-0.78×	4.85×	-4.49×	7.55×	18.66×
Dividend yield	2.4%	2.5%	3.2%	4.4%	3.3%	0.0%	5.6%	3.8%
Payout ratio	30.3%	26.7%	44.2%	-108.9%	88.3%	0.0%	103.7%	37.2%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	21.5%	25.9%	19.3%	-9.0%	9.4%	-25.4%	10.6%	28.2%
Return on invested capital	8.1%	8.9%	5.9%	-0.8%	6.8%	-4.9%	3.4%	17.6%
Return on assets	6.5%	7.1%	4.5%	-1.8%	2.0%	-4.8%	2.6%	12.5%
Free cash flow yield	7.9%	11.5%	16.1%	-1.6%	1.7%	-2.1%	5.6%	6.9%
Earnings yield	7.8%	9.3%	7.3%	-4.1%	3.8%	-8.8%	5.4%	10.2%
Enterprise value	$13.4B	$12.2B	$10.5B	$9.8B	$12.2B	$13.2B	$12.9B	$10B
Net debt / EBITDA	1.81×	1.82×	3.05×	9.82×	5.41×	-14.08×	5.44×	0.09×
Cash conversion cycle (days)	33	32	34	49	48	38	44	43