MeritValue

GAP INC

GAPdata completeness 100%19 fiscal years on file
The thesis, from the filings

GAP INC earns about 21% on invested capital, far above its ~9% cost of capital, with a roughly flat share count — a real edge showing up in the numbers. The estimate methods put fair value between $13.55 and $55.01 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2022FY 2023FY 2024FY 2025FY 2026
Revenue$16.7B1$15.6B2$14.9B3$15.1B3$15.4B3
Net income$256M4−$202M5$502M6$844M6$816M6
Operating cash flow$809M7$607M8$1.53B9$1.49B9$1.29B9
Capital expenditure$694M10$685M11$420M12$447M12$470M12
Free cash flow (derived)$115M7−$78M8$1.11B9$1.04B9$823M9
Total debt$1.48B13$1.49B14$1.49B15$1.49B16$1.49B16
Cash & equivalents$877M17$1.22B18$1.87B19$2.34B19$2.62B19
Diluted shares383.0M367.0M376.0M384.0M384.0M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$98.98
your share of equity
Profit it earned you last year
$21.25
Free cash flow it threw off
$21.43
Debt you’d be carrying
$38.85

10 shares is a claim on $98.98 of net worth that earned you $21.25 and generated $21.43 of cash last year, against $38.85 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
21% avg · 5y
FY22 12%FY23 -2%FY24 26%FY25 38%FY26 33%

It earned about 21% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
+0% shares · 5y

Share count is roughly flat over 5 years — little dilution, little buyback. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $13.55 and $55.01 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$55.01
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth5.0%
  • fcfBase$1.04B
DCF · Growth Exit 5Y
$50.94
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth5.0%
  • fcfBase$1.04B
Earnings Power Value
$13.55
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$502M
  • growthAssumed0.0%
Graham Number
$21.78
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years5.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $50.94
The three cases
Bear0.0%$41.59
Base5.0%$50.94
Bull10.0%$62.14

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 5.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2022-01-29 · accession 0000039911-24-000066 (Revenues)
  2. 10-K · period ending 2023-01-28 · accession 0000039911-25-000029 (Revenues)
  3. 10-K · period ending 2024-02-03 · accession 0001628280-26-018573 (Revenues)
  4. 10-K · period ending 2022-01-29 · accession 0000039911-24-000066 (NetIncomeLoss)
  5. 10-K · period ending 2023-01-28 · accession 0000039911-25-000029 (NetIncomeLoss)
  6. 10-K · period ending 2024-02-03 · accession 0001628280-26-018573 (NetIncomeLoss)
  7. 10-K · period ending 2022-01-29 · accession 0000039911-24-000066 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2023-01-28 · accession 0000039911-25-000029 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2024-02-03 · accession 0001628280-26-018573 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2022-01-29 · accession 0000039911-24-000066 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2023-01-28 · accession 0000039911-25-000029 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2024-02-03 · accession 0001628280-26-018573 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2022-01-29 · accession 0000039911-23-000015 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2023-01-28 · accession 0000039911-24-000066 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2024-02-03 · accession 0000039911-25-000029 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2025-02-01 · accession 0001628280-26-018573 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2022-01-29 · accession 0000039911-24-000066 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2023-01-28 · accession 0000039911-25-000029 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2024-02-03 · accession 0001628280-26-018573 (CashAndCashEquivalentsAtCarryingValue)