GAP PE Ratio & Valuation,Is GAP Overvalued

GAP Relative Valuation

GAP's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, GAP is overvalued; if below, it's undervalued.

Historical Valuation

Gap Inc (GAP) is now in the Fair zone, suggesting that its current forward PS ratio of 0.63 is considered Fairly compared with the five-year average of 13.41. The fair price of Gap Inc (GAP) is between 20.81 to 31.35 according to relative valuation methord.

Relative Value

Fair Zone

20.81-31.35

Current Price：26.34

Fair

11.94

8.55

EV/EBITDA

Gap Inc. (GAP) has a current EV/EBITDA of 8.55. The 5-year average EV/EBITDA is 9.66. The thresholds are as follows: Strongly Undervalued below 4.35, Undervalued between 4.35 and 7.01, Fairly Valued between 12.32 and 7.01, Overvalued between 12.32 and 14.97, and Strongly Overvalued above 14.97. The current Forward EV/EBITDA of 8.55 falls within the Historic Trend Line -Fairly Valued range.

11.43

EV/EBIT

Gap Inc. (GAP) has a current EV/EBIT of 11.43. The 5-year average EV/EBIT is 23.83. The thresholds are as follows: Strongly Undervalued below -29.41, Undervalued between -29.41 and -2.79, Fairly Valued between 50.46 and -2.79, Overvalued between 50.46 and 77.08, and Strongly Overvalued above 77.08. The current Forward EV/EBIT of 11.43 falls within the Historic Trend Line -Fairly Valued range.

0.63

Gap Inc. (GAP) has a current PS of 0.63. The 5-year average PS is 0.45. The thresholds are as follows: Strongly Undervalued below 0.14, Undervalued between 0.14 and 0.30, Fairly Valued between 0.61 and 0.30, Overvalued between 0.61 and 0.77, and Strongly Overvalued above 0.77. The current Forward PS of 0.63 falls within the Overvalued range.

7.16

P/OCF

Gap Inc. (GAP) has a current P/OCF of 7.16. The 5-year average P/OCF is 5.96. The thresholds are as follows: Strongly Undervalued below 2.33, Undervalued between 2.33 and 4.15, Fairly Valued between 7.78 and 4.15, Overvalued between 7.78 and 9.59, and Strongly Overvalued above 9.59. The current Forward P/OCF of 7.16 falls within the Historic Trend Line -Fairly Valued range.

11.61

P/FCF

Gap Inc. (GAP) has a current P/FCF of 11.61. The 5-year average P/FCF is 14.33. The thresholds are as follows: Strongly Undervalued below -11.53, Undervalued between -11.53 and 1.40, Fairly Valued between 27.26 and 1.40, Overvalued between 27.26 and 40.18, and Strongly Overvalued above 40.18. The current Forward P/FCF of 11.61 falls within the Historic Trend Line -Fairly Valued range.

Gap Inc (GAP) has a current Price-to-Book (P/B) ratio of 2.68. Compared to its 3-year average P/B ratio of 2.47 , the current P/B ratio is approximately 8.67% higher. Relative to its 5-year average P/B ratio of 2.57, the current P/B ratio is about 4.39% higher. Gap Inc (GAP) has a Forward Free Cash Flow (FCF) yield of approximately 7.95%. Compared to its 3-year average FCF yield of 11.21%, the current FCF yield is approximately -29.06% lower. Relative to its 5-year average FCF yield of 4.91% , the current FCF yield is about 61.89% lower.

2.68

P/B

Median3y

2.47

Median5y

2.57

7.95

FCF Yield

Median3y

11.21

Median5y

4.91

Competitors Valuation Multiple

The average P/S ratio for GAP's competitors is 1.13, providing a benchmark for relative valuation. Gap Inc Corp (GAP) exhibits a P/S ratio of 0.63, which is -44.4% above the industry average. Given its robust revenue growth of 2.95%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

Revenue Growth

Market Cap

Performance Decomposition

Market capitalization of GAP increased by 11.47% over the past 1 year. The primary factor behind the change was an increase in P/E Change from 9.49 to 11.85.

The secondary factor is the Revenue Growth, contributed 2.95%to the performance.

Overall, the performance of GAP in the past 1 year is driven by P/E Change. Which is more unsustainable.

2.95%

3.83B → 3.94B

Revenue Growth

-16.34%

7.16 → 5.99

Margin Expansion

24.86%

9.49 → 11.85

P/E Change

11.47%

23.63 → 26.34

Mkt Cap Growth

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Frequently Asked Questions

Is Gap Inc (GAP) currently overvalued or undervalued?

What is Gap Inc (GAP) fair value?

GAP's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average , adjusted by weights. The fair price of Gap Inc (GAP) is between 20.81 to 31.35 according to relative valuation methord.

How does GAP's valuation metrics compare to the industry average?

The average P/S ratio for GAP's competitors is 1.13, providing a benchmark for relative valuation. Gap Inc Corp (GAP) exhibits a P/S ratio of 0.63, which is -44.40% above the industry average. Given its robust revenue growth of 2.95%, this premium appears unsustainable.

What is the current P/B ratio for Gap Inc (GAP) as of Dec 15 2025?

As of Dec 15 2025, Gap Inc (GAP) has a P/B ratio of 2.68. This indicates that the market values GAP at 2.68 times its book value.

What is the current FCF Yield for Gap Inc (GAP) as of Dec 15 2025?

As of Dec 15 2025, Gap Inc (GAP) has a FCF Yield of 7.95%. This means that for every dollar of Gap Inc’s market capitalization, the company generates 7.95 cents in free cash flow.

What is the current Forward P/E ratio for Gap Inc (GAP) as of Dec 15 2025?

As of Dec 15 2025, Gap Inc (GAP) has a Forward P/E ratio of 11.94. This means the market is willing to pay $11.94 for every dollar of Gap Inc’s expected earnings over the next 12 months.

What is the current Forward P/S ratio for Gap Inc (GAP) as of Dec 15 2025?

As of Dec 15 2025, Gap Inc (GAP) has a Forward P/S ratio of 0.63. This means the market is valuing GAP at $0.63 for every dollar of expected revenue over the next 12 months.

GAP Valuation