The Gap, Inc. operates as an apparel retail company worldwide. It offers apparel, accessories, and personal care products for men, women, and children under the Gap, Banana Republic, Old Navy, Athleta, and Intermix brands. The company was founded in 1969 and is based in San Francisco, California.
GPS Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Gap Inc. To summarize, we found that Gap Inc ranked in the 46th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 11.33%. The most interesting components of our discounted cash flow analysis for Gap Inc ended up being:
The company's compound free cash flow growth rate over the past 5.53 years comes in at -0.13%; that's greater than only 14.21% of US stocks we're applying DCF forecasting to.
Gap Inc's weighted average cost of capital (WACC) is 6%; for context, that number is higher than merely 1.61% of tickers in our DCF set.
As a business, Gap Inc experienced a tax rate of about 23% over the past twelve months; relative to its sector (Consumer Cyclical), this tax rate is higher than 86.22% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Gap Inc? See GOLF, TGNA, TUP, CWH, and MUSA.
Gap Inc. (GPS) Q1 2020 Earnings Conference Call June 4, 2020 5:00 PM ET Company Participants Tina Romani – Senior Director of Investor Relation Sonia Syngal – President and Chief Executive Officer Katrina O'Connell – Executive Vice President and Chief Financial Officer Conference Call Participants Dana Telsey – Telsey Group...