time to go long on GAP or another fake?

16 ก.ย. 2023

As the gradual increase of value has been apparently growing slowly month over month from the low 7-8s, this stock is midway from its 52 week high. Down over 50% over a 5 year timeframe, does the idea of GAP recovering be underway prior to 2023 holiday season. I don't personally shop at the store, compared to ANF, GES who have fared much better compared to FOOTLOCKER & AEO. I'm not very confident in the consumer discretionary sector however the triple bottom forming on the daily and weekly timeframe a recovery happening OVER TIME. Entering long now would be at the individuals own risk.

The company has paid dividend for 3 consecutive years but the question would low revenue in the future under a high interest rate environment warrant for the dividend to be cut or have troubles paying to shareholders etc.
Over the last 3 months has the return been good, and the company has been profitable over the last year. A con would be stock price volatility, competitors in this field would include American Eagle, Guess, Urban Outfitters, Abercombie AND Fitch etc.
Using a source giving me 20 analysts have a price target of $6-$24.


GPS: The Gap, Inc.
Stock Price
11.19 USD
Fair Value
14.95 USD
Metrics Range Conclusion
Discount Rate 14.0% - 13.0% 13.5%
Terminal Revenue Multiple 0.9x - 1.0x 1.0x
Fair Value $13.37 - $16.59 $14.95
Upside 19.3% - 48.1% 33.5%
-0.5%
Revenue 5y CAGR
8.1%
5y Avg EBITDA Margin
NM
Unlevered FCF 5y CAGR5


Stock Price Reactions After Earnings

2023-08-24
9.65
10.22
5.91% Increase
2023-05-25
7.61
8.34
9.59% Increase