Value Sense
GPS
The Gap, Inc. (GPS)
Last Price$20.20.7%
Market Cap$7,580.2M
WACC
6.3%
Cost of Equity
10.6%
Cost of Debt
0.3%
Debt to Equity
72.0%
Beta
0.6
Stock quality
6/10
Good
GPS
is 14.7% undervalued
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GPS WACC

Recent WACC calculation

as of Sep 18, 2024
Cost of Equity
% share of Total Capital
10.6%
58.1%
Risk-free rate
3.7%
Beta
1.5
Equity Risk Premium
4.6%
Country risk premium
0.0%
Cost of Debt (after-tax)
% share of Total Capital
0.3%
41.9%
Average Cost of Debt
0.4%
Effective Tax Rate
30.4%
WACC
6.3%

WACC dynamics

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GPS Cost of Equity

Recent Cost of Equity calculation

as of Sep 18, 2024
Risk-free rate
3.7%
Beta
1.5
Equity risk premium
4.6%
Country risk premium
0.0%
Cost of Equity
10.6%

Cost of Equity dynamics

GPS vs Peer Set: Discount Rate Comparison

WACC
Cost of Equity

General

Discount rate

financials

Company name

Revenue growth

EPS growth

Net Income margin

The Gap, Inc. logo
The Gap, Inc.GPS
6.3%
(4.7%)
N/A
3.4%
Median Peer Set
8.9%
8.1%
35.0%
8.5%
On Holding AG logo
On Holding AGONON
10.9%
32.1%
190.1%
10.5%
Boot Barn Holdings, Inc. logo
Boot Barn Holdings, Inc.BOOT
9.5%
0.6%
(14.9%)
8.8%
Lululemon Athletica Inc. logo
Lululemon Athletica Inc.LULU
9.5%
18.6%
82.5%
16.1%
Urban Outfitters, Inc. logo
Urban Outfitters, Inc.URBN
9.2%
7.7%
40.0%
7.3%
Burlington Stores, Inc. logo
Burlington Stores, Inc.BURL
9.0%
9.4%
48.6%
4.7%
Abercrombie & Fitch Co. logo
Abercrombie & Fitch Co.ANF
8.9%
15.8%
10,783.3%
7.7%
Ross Stores, Inc. logo
Ross Stores, Inc.ROST
8.5%
3.7%
13.8%
9.9%
The Buckle, Inc. logo
The Buckle, Inc.BKE
8.0%
(6.3%)
(14.1%)
17.4%
The TJX Companies, Inc. logo
The TJX Companies, Inc.TJX
7.9%
8.6%
30.0%
8.3%
American Eagle Outfitters, Inc. logo
American Eagle Outfitters, Inc.AEO
6.8%
5.4%
26.1%
3.2%

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FAQ

What is The Gap, Inc.'s discount rate as of Sep 18, 2024?

As of Sep 18, 2024, The Gap, Inc.'s discount rate is 6.29%. This rate is determined based on the weighted average cost of capital (WACC) and the cost of equity, factoring in The Gap, Inc.'s capital structure and risk profile.

What is The Gap, Inc.'s weighted average cost of capital (WACC)?

The Gap, Inc.'s WACC as of Sep 18, 2024, is 6.29%. This value is calculated by blending the cost of debt and cost of equity, reflecting the company’s overall cost of financing its operations.

What is The Gap, Inc.'s cost of equity?

The Gap, Inc.'s cost of equity is 10.6%, as of Sep 18, 2024. This is the return that shareholders expect based on the stock's risk level and market conditions, used to calculate the discount rate for valuing future cash flows.