The Gap, Inc. (GAP) AI Stock Analysis

The Gap, Inc. operates as an apparel retail company in the United States, Canada, Japan, Taiwan, and internationally. The company offers apparel, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, and Athleta brands. Products are sold through company-operated stores, franchise stores, e-commerce websites, third-party arrangements, and licensing partnerships. The company maintains franchise agreements to operate its four primary brands across Asia, Europe, Latin America, the Middle East, and Africa. Founded in 1969 and based in San Francisco, California, the company employs 79,000 people.

Gap's revenue grew at a 5-year CAGR of 2.2% from FY2021 to FY2026. Annual revenue shifted from $16.67B in FY2022 to $15.62B in FY2023, $14.89B in FY2024, and rebounded to $15.09B in FY2025 and $15.37B in FY2026. Gross margin rose to 40.8% in FY2026 from 34.3% in FY2023, supporting an operating margin of 7.3% and EPS of $2.15. For the trailing twelve months, revenue reached $15.33B with a net profit margin of 8.1%. In the quarter ended July 31, 2026, revenue fell 2.0% year-over-year, while quarterly earnings expanded 142.1%.

As of July 31, 2026, Gap held $2.48B in cash and short-term investments against total debt of $5.72B, leaving net debt at $3.23B. The current ratio stood at 1.82, with a debt-to-equity ratio of 1.45 on shareholders' equity of $3.95B. In FY2026, operating cash flow was $1.29B and free cash flow reached $823.0M. Capital deployment in FY2026 included $470.0M in capital expenditures, $247.0M in dividends paid, and $155.0M spent on share buybacks.

Gap trades at a trailing P/E of 7.0x and a forward P/E of 8.9x, both below the median of its US-listed Consumer Cyclical peers of 18.0x and 14.1x, respectively. The company's enterprise value of $10.77B represents an EV/EBITDA multiple of 4.7x, compared to the peer median of 11.1x. Its price-to-sales ratio is 0.5x, below the peer median of 0.7x. Over the past 12 months, GAP gained 15.4%, trailing the S&P 500 (SPY) return of 16.8%. Over five years, the stock gained 27.5% compared to 83.0% for the S&P 500.

Gap distributes a quarterly dividend with an annualized forward payout of $0.70 per share, yielding 3.03%. The dividend is supported by a payout ratio of 35.0% and an uninterrupted payment history spanning 41 consecutive years. Over the past 5 years, the dividend increased at an annualized rate of 21.6%. The most recent ex-dividend date was October 7, 2026.

Wall Street analysts hold 7 Strong Buy, 1 Buy, and 13 Hold ratings on the stock, with zero Sell or Strong Sell ratings. The mean price target of $26.51 represents 14.7% upside compared to the October 16, 2026 closing price of $23.12. For the fiscal year ending January 31, 2027, consensus estimates project EPS of $2.41 on revenue of $15.54B. Gap exceeded EPS estimates in 2 of the past 4 quarters, and its next earnings release is scheduled for November 19, 2026.

This page is an AI-written research summary of The Gap, Inc. (GAP). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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