Gap Intrinsic Value Calculation – GAP Reports Third Quarter Earnings for FY2024
November 24, 2023
🌥️Earnings Overview
For the third quarter of fiscal year 2024, GAP ($NYSE:GPS) reported total revenue of USD 3767.0 million, a decrease of 6.7% compared to the same period in the previous year. Net income for this quarter decreased by 22.7%, amounting to USD 218.0 million.
Market Price
On Thursday, GAP announced their third quarter earnings for fiscal year 2024. GAP stock opened at $13.8 and closed at $13.7, representing a decline of 2.8% from the prior closing price of $14.1. The news of the earnings report sent GAP shares tumbling, as investors were not pleased with the company’s performance.
The company is now focused on continuing to grow its e-commerce sales and expanding its product offerings to meet customer demands. Looking ahead, GAP remains optimistic about its prospects, as their strong financial position and experienced management team should help them weather any further turbulence in the market. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Gap. More…
| Total Revenues | Net Income | Net Margin |
| 14.83k | 44 | 0.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Gap. More…
| Operations | Investing | Financing |
| 1.55k | -311 | -570 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Gap. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 11.05k | 8.59k | 6.12 |
Key Ratios Snapshot
Some of the financial key ratios for Gap are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 1.8% | -15.9% | 2.2% |
| FCF Margin | ROE | ROA |
| 7.8% | 9.1% | 1.9% |
Analysis – Gap Intrinsic Value Calculation
At GoodWhale, we conducted an analysis of GAP‘s wellbeing and used our proprietary Valuation Line to calculate a fair value of GAP shares at $14.8. However, at the time of writing, GAP stock is being traded at $13.7, representing a 7.4% undervalued price. This could be a great opportunity for investors to purchase GAP shares at a discounted rate. Therefore, we believe GAP should be a great buy for investors looking for a long-term investment. More…
Peers
Gap Inc. is an American clothing and accessories retailer founded in 1969 by Don and Doris Fisher. The company operates six primary brands: Gap, Banana Republic, Old Navy, Athleta, Intermix, and Janie and Jack. Gap Inc. is headquartered in San Francisco, California. As of February 2019, Gap Inc. operated 3,727 stores worldwide and employed approximately 135,000 people. Abercrombie & Fitch Co. is an American lifestyle retailer that focuses on selling casual wear for young people. The company was founded in 1892 by David T. Abercrombie and Ezra Fitch and is headquartered in New Albany, Ohio. As of February 2019, the company operated 792 stores across the globe and employed approximately 23,000 people. The Children’s Place Inc. is an American children’s clothing retailer founded in 1969. The company is headquartered in Secaucus, New Jersey and as of February 2019, operated 1,097 stores worldwide. The company employs approximately 19,000 people. World Co Ltd is a Japanese retail company founded in 1949. The company operates a chain of department stores in Japan and as of February 2019, employed approximately 31,000 people.
– Abercrombie & Fitch Co ($NYSE:ANF)
Abercrombie & Fitch Co, a leading retailer of casual apparel, has a market cap of 817.96M as of 2022. The company’s ROE is 14.85%. Abercrombie & Fitch Co operates stores under the Abercrombie & Fitch, abercrombie kids, and Hollister Co. banners in the United States and internationally. The company also sells its merchandise through its e-commerce Websites.
– Children’s Place Inc ($NASDAQ:PLCE)
The Children’s Place Inc is a publicly traded company with a market capitalization of $498.72 million as of 2022. The company operates in the children’s apparel industry and generates revenue through the sale of children’s clothing, shoes, and accessories. The Children’s Place Inc has a return on equity of 55.72%. The company’s primary target market is parents of children aged 0-12 years old.
– World Co Ltd ($TSE:3612)
Suntech Power Holdings Co., Ltd. is a solar company. The Company manufactures solar cells and modules, which it sells to original equipment manufacturers and system integrators. Suntech also develops, designs, builds and sells photovoltaic systems that primarily use the Company’s solar modules.
Summary
Investors analyzing GAP‘s performance in the third quarter of FY2024 can take solace in the fact that while total revenue decreased 6.7% year over year, net income decreased at a much slower rate of 22.7%. This suggests that GAP has been successful in controlling costs and improving operational efficiency. Overall, GAP is still in a strong position despite some turnover in the market, and investors should keep an eye on the company for future growth potential.
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