The Gap, Inc. (GAP)vsRoss Stores Inc (ROST)
GAP
The Gap, Inc.
$21.56
0.00%
CONSUMER CYCLICAL · Cap: $7.88B
ROST
Ross Stores Inc
$230.37
-1.15%
CONSUMER CYCLICAL · Cap: $75.95B
Smart Verdict
WallStSmart Research — data-driven comparison
Ross Stores Inc generates 54% more annual revenue ($23.78B vs $15.40B). ROST leads profitability with a 9.7% profit margin vs 6.3%. GAP appears more attractively valued with a PEG of 1.28. GAP earns a higher WallStSmart Score of 69/100 (B-).
GAP
Strong Buy69
out of 100
Grade: B-
ROST
Buy64
out of 100
Grade: C+
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
-25.9%
Fair Value
$21.81
Current Price
$21.56
$0.25 premium
Margin of Safety
-8.4%
Fair Value
$177.67
Current Price
$230.37
$52.70 premium
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Attractively priced relative to earnings
Earnings expanding 76.5% YoY
Every $100 of equity generates 21 in profit
Reasonable price relative to book value
Every $100 of equity generates 37 in profit
Safe zone — low bankruptcy risk
Large-cap with strong market position
Revenue surging 20.6% year-over-year
Earnings expanding 37.4% YoY
Areas to Watch
1.0% revenue growth
6.3% margin — thin
Elevated debt levels
Weak financial health signals
Premium valuation, high expectations priced in
Trading at 11.7x book value
Expensive relative to growth rate
Comparative Analysis Report
WallStSmart ResearchBull 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.
Bull Case : ROST
The strongest argument for ROST centers on Return on Equity, Altman Z-Score, Market Cap. Revenue growth of 20.6% demonstrates continued momentum.
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.
Bear Case : ROST
The primary concerns for ROST are P/E Ratio, Price/Book, PEG Ratio.
Key Dynamics to Monitor
GAP profiles as a value stock while ROST is a growth play — different risk/reward profiles.
GAP carries more volatility with a beta of 2.01 — expect wider price swings.
ROST is growing revenue faster at 20.6% — sustainability is the question.
ROST generates stronger free cash flow (627M), providing more financial flexibility.
Bottom Line
GAP scores higher overall (69/100 vs 64/100). 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.
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.
Ross Stores Inc
CONSUMER CYCLICAL · APPAREL RETAIL · USA
Ross Stores, Inc., operating under the brand name Ross Dress for Less, is an American chain of discount department stores headquartered in Dublin, California.
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