The Discounted Cash Flow (DCF) valuation of Gap Inc (GPS) is 26.56 USD. With the latest stock price at 24.55 USD, the upside of Gap Inc based on DCF is 8.2%.

Is Gap a buy or a sell?

Based on the latest price of 24.55 USD and our DCF valuation, Gap Inc (GPS) is a buy. Buying Gap stocks now will result in a potential gain of 8.2%.

	Range	Selected
WACC / Discount Rate	9.1% - 12.1%	10.6%
Long-term Growth Rate	1.0% - 3.0%	2.0%
Fair Price	21.07 - 36.41	26.56
Upside	-14.2% - 48.3%	8.2%

24.55 USD

Stock Price

26.56 USD

Fair Price

REVENUE & EXPENSES

CAPEX

D&A

WORKING CAPITAL

TERMINAL VALUE

Gap DCF Valuation: Revenue & Expenses Forecast

(USD in millions)		Projections

	02-2024	02-2025	02-2026	02-2027	02-2028	02-2029

Revenue	14,889	15,398	15,938	16,257	16,582	16,914
% Growth	5%	3%	4%	2%	2%	2%

Cost of goods sold	(9,110)	(9,233)	(9,366)	(9,362)	(9,358)	(9,354)
% of Revenue	61%	60%	59%	58%	56%	55%

Selling, G&A expenses	(1,202)	(1,243)	(1,287)	(1,312)	(1,339)	(1,365)
% of Revenue	8%	8%	8%	8%	8%	8%

Research & Development	(37)	(38)	(40)	(40)	(41)	(42)
% of Revenue	0%	0%	0%	0%	0%	0%

Net interest & other expenses	(3,984)	(4,120)	(4,265)	(4,350)	(4,437)	(4,526)
% of Revenue	27%	27%	27%	27%	27%	27%

Tax expense	(54)	(213)	(273)	(332)	(392)	(453)
Tax rate	10%	28%	28%	28%	28%	28%

Net profit	502	551	708	860	1,015	1,173
% Margin	3%	4%	4%	5%	6%	7%