Head-To-Head Review: GAP (GAP) versus Its Competitors

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

Risk & Volatility

GAP has a beta of 2.35, indicating that its share price is 135% more volatile than the S&P 500. Comparatively, GAP’s competitors have a beta of 2.17, indicating that their average share price is 117% more volatile than the S&P 500.

Insider and Institutional Ownership

73.0% of shares of all “Family clothing stores” companies are owned by institutional investors. 12.5% of shares of all “Family clothing stores” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares GAP and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
GAP	$15.17 billion	$502.00 million	-0.79
GAP Competitors	$10.54 billion	$637.10 million	10.73

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

Analyst Recommendations

This is a summary of current recommendations and price targets for GAP and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	0	3	0	0	2.00
GAP Competitors	359	2138	2392	31	2.43

GAP currently has a consensus price target of $27.00, suggesting a potential upside of 26.05%. As a group, “Family clothing stores” companies have a potential upside of 9.52%. Given GAP’s higher probable upside, research analysts clearly believe GAP is more favorable than its competitors.

Profitability

This table compares GAP and its competitors’ 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%

Dividends

GAP pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. 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.

Summary

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

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.