Critical Comparison: GAP (GAP) & The Competition

GAP (NYSE:GAP) is one of 15 public companies in the “Family clothing stores” industry, but how does it weigh in compared to its rivals? We will compare GAP to similar businesses based on the strength of its earnings, institutional ownership, valuation, analyst recommendations, dividends, profitability and risk.

Risk and Volatility

GAP has a beta of 2.35, suggesting that its share price is 135% more volatile than the S&P 500. Comparatively, GAP’s rivals have a beta of 1.81, suggesting that their average share price is 81% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for GAP and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	0	3	0	0	2.00
GAP Competitors	359	2140	2393	31	2.43

GAP presently has a consensus price target of $27.00, suggesting a potential upside of 30.56%. As a group, “Family clothing stores” companies have a potential upside of 14.53%. Given GAP’s higher possible upside, equities analysts clearly believe GAP is more favorable than its rivals.

Institutional & Insider Ownership

73.0% of shares of all “Family clothing stores” companies are held by institutional investors. 12.5% of shares of all “Family clothing stores” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

GAP pays an annual dividend of $0.60 per share and has a dividend yield of 2.9%. 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 1.4% and pay out -173.8% of their earnings in the form of a dividend.

Profitability

This table compares GAP and its rivals’ 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	3.12%	-376.16%	6.89%

Earnings and Valuation

This table compares GAP and its rivals top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
GAP	$15.17 billion	$502.00 million	-0.76
GAP Competitors	$10.59 billion	$637.10 million	10.34

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

Summary

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

GAP Company Profile

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.