Cato Corporation (CATO)vsThe Gap, Inc. (GAP)
CATO
Cato Corporation
$3.18
-3.05%
CONSUMER CYCLICAL · Cap: $65.47M
GAP
The Gap, Inc.
$21.56
0.00%
CONSUMER CYCLICAL · Cap: $7.88B
Smart Verdict
WallStSmart Research — data-driven comparison
The Gap, Inc. generates 2252% more annual revenue ($15.40B vs $654.67M). GAP leads profitability with a 6.3% profit margin vs 0.0%. CATO appears more attractively valued with a PEG of 1.17. GAP earns a higher WallStSmart Score of 69/100 (B-).
CATO
Buy57
out of 100
Grade: C
GAP
Strong Buy69
out of 100
Grade: B-
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
+76.6%
Fair Value
$12.93
Current Price
$3.18
$9.75 discount
Margin of Safety
-25.8%
Fair Value
$21.83
Current Price
$21.56
$0.27 premium
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Reasonable price relative to book value
Earnings expanding 181.7% YoY
Attractively priced relative to earnings
Earnings expanding 76.5% YoY
Every $100 of equity generates 21 in profit
Reasonable price relative to book value
Areas to Watch
0.5% revenue growth
Grey zone — moderate risk
Smaller company, higher risk/reward
0.0% margin — thin
1.0% revenue growth
6.3% margin — thin
Elevated debt levels
Weak financial health signals
Comparative Analysis Report
WallStSmart ResearchBull Case : CATO
The strongest argument for CATO centers on Price/Book, EPS Growth. PEG of 1.17 suggests the stock is reasonably priced for its growth.
Bull Case : GAP
The strongest argument for GAP centers on P/E Ratio, EPS Growth, Return on Equity. PEG of 1.28 suggests the stock is reasonably priced for its growth.
Bear Case : CATO
The primary concerns for CATO are Revenue Growth, Altman Z-Score, Market Cap. Thin 0.0% margins leave little buffer for downturns.
Bear Case : GAP
The primary concerns for GAP are Revenue Growth, Profit Margin, Debt/Equity. Debt-to-equity of 1.54 is elevated, increasing financial risk.
Key Dynamics to Monitor
GAP carries more volatility with a beta of 2.01 — expect wider price swings.
GAP is growing revenue faster at 1.0% — sustainability is the question.
GAP generates stronger free cash flow (78M), providing more financial flexibility.
Monitor APPAREL RETAIL industry trends, competitive dynamics, and regulatory changes.
Bottom Line
GAP scores higher overall (69/100 vs 57/100). CATO offers better value entry with a 76.6% margin of safety. Both earn "Strong Buy" and "Buy" ratings respectively — the choice depends on your investment horizon and risk tolerance.
This analysis is generated from publicly available financial data. Not financial advice.
Cato Corporation
CONSUMER CYCLICAL · APPAREL RETAIL · USA
The Cato Corporation is a specialty clothing and fashion accessories retailer primarily in the southeastern United States. The company is headquartered in Charlotte, North Carolina.
The Gap, Inc.
CONSUMER CYCLICAL · APPAREL RETAIL · USA
The Gap, Inc. is a prominent global apparel retailer founded in 1969, known for its diverse portfolio of iconic brands including Gap, Banana Republic, Old Navy, and Athleta. Headquartered in San Francisco, the company services over 40 countries and prioritizes quality, value, and style for a broad customer demographic. As it navigates the dynamic retail landscape, Gap is committed to enhancing its digital transformation and sustainability efforts, aiming to bolster its e-commerce presence while pursuing innovative product offerings and strategic growth initiatives to sustain its competitive advantage.
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