The Gap (GAP) Stock Analysis & Winston Score

Gap Inc. is a clothing retailer that sells casual apparel, accessories, and personal care products. It owns four well-known brands: Gap, Old Navy, Banana Republic, and Athleta. The company sells to everyday shoppers across a wide range of ages and income levels, making it one of the largest specialty apparel retailers in the United States.

Gap makes money by selling clothes through its own stores and its websites. It operates thousands of locations mostly in North America, with some international presence through franchise partners. Old Navy is the largest and most profitable brand, which means the whole company leans heavily on that one brand performing well. The main risk Gap faces is intense competition from fast-fashion retailers like H&M and Zara, as well as online players like Amazon and Shein, which can undercut Gap on price and speed. Stabilizing Banana Republic and growing Athleta in the activewear market are the key growth opportunities being pursued.

Winston Score History

Politician Trades

1 trades / 12mo

0 Congressional buys and 1 sell on GAP in the last 12 months.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+2.1% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

-13.2% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

36.1%ownership

↑ Rising

Insiders increasing their stake — aligned with shareholders

Cash Position

Cash flow positive

$2.6B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

The Gap is growing revenue at 2% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Share count broadly stable

+0.3% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 383.0M (2022) → 384.0M (2026)

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

38.1%

Modest — 38.1% gross margin

Operating Margin

5.4%

Thin — 5.4% operating margin

ROCE

4.3%

Weak — 4.3% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+4.8%

Slow sales growth (4.8% YoY)

EPS YoY

-3.9%

Earnings shrinking (-3.9% YoY)

Slight earnings drop. Typical near a cyclical low.

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

283%

Turns 283% of profit into real cash

FCF Margin

10.6%

Modest free cash flow (10.6%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

0.39

Conservative — low debt load (0.39)

Interest Cover

26.52x

Comfortably covers interest (26.5x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

9.3x

Attractive valuation — P/E 9.3

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward

+1.0

GROWING

Earnings roughly flat

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Dividends

Dividend Yield

3.46%

Moderate income — 3.46% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth

+7.9%

Dividend growing modestly (7.9% YoY)

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