Gap Inc (GPS, Financial), a renowned player in the Retail - Cyclical industry, has seen a significant surge in its stock price over the past three months. The company's stock price, currently standing at $10.86, has witnessed an impressive 18.49% increase during this period. This rise is even more noteworthy considering the stock's slight dip of 1.98% over the past week. With a market cap of $4.02 billion, Gap Inc's stock performance has certainly caught the attention of investors.
According to the GF Value, a metric defined by GuruFocus.com that calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates, Gap Inc's stock is currently modestly undervalued with a GF Value of $13.89. This is a significant shift from three months ago when the stock was significantly undervalued with a GF Value of $15.25.
Company Overview
Gap Inc, founded in 1969 and based in San Francisco, is a leading retailer of apparel, accessories, and personal-care products. The company operates under various brands including Gap, Old Navy, Banana Republic, and Athleta, with Old Navy generating more than half of Gap's sales. Gap Inc operates approximately 2,600 stores in North America, Europe, and Asia and franchises about 850 more in Asia, Europe, Latin America, and other regions. 
Profitability Analysis
Gap Inc's Profitability Rank stands at 7/10, indicating a relatively high level of profitability. The company's operating margin of 1.67% is better than 38.29% of the companies in the industry. The ROE (Return on Equity) of 4.67% and ROA (Return on Assets) of 0.94% are better than 46.45% and 41.14% of the companies in the industry, respectively. The company's ROIC (Return on Invested Capital) of 1.57% is better than 38.19% of the companies in the industry. Over the past 10 years, Gap Inc has had 8 years of profitability, indicating a generally stable business. 
Growth Prospects
Despite its impressive profitability, Gap Inc's growth prospects appear to be relatively low, with a Growth Rank of 1/10. The company's 3-year and 5-year revenue growth rates per share stand at -0.60% and 0.60% respectively. The company's future total revenue growth rate estimate stands at -1.76%, which is better than 11.07% of the companies in the industry. 
Major Stock Holders
Dodge & Cox is the largest holder of Gap Inc's stock, owning 10.18% of the shares. Richard Pzena (Trades, Portfolio) and Ken Fisher (Trades, Portfolio) follow, holding 2.76% and 1.64% of the shares, respectively.
Competitive Landscape
Gap Inc faces stiff competition from other companies in the Retail - Cyclical industry. Its main competitors include Urban Outfitters Inc (URBN, Financial) with a market cap of $2.94 billion, American Eagle Outfitters Inc (AEO, Financial) with a market cap of $3.35 billion, and Abercrombie & Fitch Co (ANF, Financial) with a market cap of $2.91 billion.
Conclusion
In conclusion, Gap Inc's stock performance has been impressive over the past three months, with an 18.49% increase. The company's profitability rank of 7/10 indicates a relatively high level of profitability. However, its growth rank of 1/10 suggests low growth prospects. Despite this, the company's stock is currently modestly undervalued according to the GF Value, indicating potential for future growth. With major holders like Dodge & Cox, Richard Pzena (Trades, Portfolio), and Ken Fisher (Trades, Portfolio), and facing competition from companies like Urban Outfitters Inc, American Eagle Outfitters Inc, and Abercrombie & Fitch Co, Gap Inc's future performance will be interesting to watch.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
