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Gap - AI Stock Analysis
Analysis generated August 28, 2025
Gap Inc. (NYSE: GPS), or simply Gap, is a prominent American worldwide clothing and accessories retailer. Founded in 1969 and headquartered in San Francisco, California, Gap is one of the world's most recognizable consumer brands with its portfolio of global brands including Old Navy, Gap, Banana Republic, and Athleta. The company operates in over 40 countries with more than 3,500 stores worldwide. Despite facing challenges in an increasingly competitive retail landscape, Gap remains a significant player in the global apparel industry.
Fundamental Analysis
The fundamental metrics for Gap present a mixed picture. Revenue for the last quarter was $3.46 billion. This revenue figure represents a decrease of 16.53% compared to the previous quarter, indicating a short-term decline that may raise concerns about the company's current operational efficiency. However, it marks a 2.21% increase compared to the same quarter last year, pointing toward positive year-over-year growth and resilience amid a challenging economic backdrop.
Net income for the last quarter stood at $193 million. This showcases a 6.31% decrease quarter-over-quarter, suggesting potential operational headwinds that need addressing. On the brighter side, this figure reflects a 22.15% increase compared to the same quarter last year, indicating improved profitability and cost management over the year.
EBITDA, an important indicator of operational profitability, was $407 million in the last quarter. While it represents a marginal decrease of 0.25% compared to the previous quarter, it signifies a robust 15.30% increase year-over-year. This improvement indicates stronger overall financial health and efficiency in managing operational costs.
The current Price-to-Earnings (P/E) ratio for Gap is 9.38. A P/E ratio below 10 can often be considered low, potentially signaling undervaluation and a bullish outlook among investors. This undervaluation could present an attractive buying opportunity for those looking to invest in a retail stock with upside potential.
Technical Analysis
Today’s stock price is $22.30, marking an increase of 9.31% month-over-month, illustrating a positive short-term trend. Over the past year, the stock has grown by 0.68%, suggesting a stable long-term upward trajectory. The current Simple Moving Average (SMA10) is 21.46, higher than the previous SMA10 of 21.32, further indicating an upward movement in price.
The Relative Strength Index (RSI) of 28.7 signals that Gap's stock is in an oversold condition, which investors typically interpret as a bullish signal. Combined with the current bullish trend, these technical indicators suggest potential for continued price appreciation in the near future.
Alternative Data Analysis
Beyond the traditional financial metrics, alternative data provides valuable insights into Gap's market dynamics. Job postings at Gap have increased by 21%, indicating potential growth and expansion, a healthy sign for the company's future prospects. Meanwhile, employee sentiment towards the business remains neutral, suggesting stability within the workforce.
In terms of customer acquisition, Gap’s website attracts an estimated 56 million visitors monthly, with no significant change observed recently. However, the number of daily mobile app downloads has risen by 17% to approximately 3,300 users per day, indicating growing customer engagement through mobile platforms. Additionally, Gap's Instagram following has increased by 4% to 3.4 million, reflecting a growing public interest and potential for enhanced brand visibility.
On the downside, Gap's Twitter following has stagnated at 570,000 with no recent growth, hinting at potential challenges in maintaining user engagement on this platform. However, the overall alternative data contributes to a reasonably positive outlook for Gap.
Additionally, AltIndex’s AI score, which evaluates a company's stock price based on a combination of fundamental, technical, and alternative data, rates Gap with an AI score of 71, signifying a buy signal.
Conclusion and Recommendation
Given the analysis, Gap Inc. shows both robust signs of growth and areas of concern. The company has demonstrated positive year-over-year growth in revenue, net income, and EBITDA, although recent quarter-over-quarter figures indicate slight declines needing attention. The low P/E ratio suggests potential undervaluation, presenting an attractive opportunity for investors.
Technical indicators such as the bullish trend and RSI suggest further upward potential for the stock in the short term. Alternative data points, including growing job postings, rising mobile app downloads, and increased Instagram following, add to the overall positive outlook for Gap.
Combining these assessments, the recommendation is that Gap Inc. appears to be a buy. Investors should consider the potential upside in stock value, reinforced by both fundamental soundness and positive technical and alternative data indicators.
Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.
