The Gap, Inc. (GAP) vs Urban Outfitters, Inc. (URBN)

The Gap, Inc. and Urban Outfitters, Inc. are both Apparel Retail companies. The Gap, Inc. is the larger, with a market value of $7.7B against $6.4B — 1.2× the size. The Gap, Inc. trades at the lower P/E: 6.4× against 11.6×. Urban Outfitters, Inc. grew revenue faster over the last twelve months: 11.0% against 1.05%. Urban Outfitters, Inc. has the higher net margin (8.79% vs 8.14%) and the lower return on invested capital (21.4% vs 35.6%). Across the 22 metrics below, The Gap, Inc. leads on 13 and Urban Outfitters, Inc. on 9.

Valuation

Metric GAP URBN Apparel Retail median
P/E 6.38 11.59 12.56
P/S 0.51 1.00 0.35
P/B 1.96 2.26 1.57
Price to free cash flow 8.09 21.86 11.15
EV/EBITDA 3.36 7.82 7.42
EV/Sales 0.48 1.05 0.51
Earnings yield 15.67% 8.63% 5.76%
Free cash flow yield 12.35% 4.58% 4.34%

Profitability

Metric GAP URBN Apparel Retail median
Gross margin 43.26% 37.48% 41.90%
Operating margin 10.99% 11.30% 2.50%
Net margin 8.14% 8.79% 3.41%
Free cash flow margin 6.24% 4.56% 2.86%
Return on equity 33.78% 20.94% 7.71%
Return on assets 9.98% 11.57% 2.85%
Return on invested capital 35.57% 21.38% 6.41%

Growth

Metric GAP URBN Apparel Retail median
Revenue growth (TTM) 1.05% 11.01% 4.14%
EPS growth (last fiscal year) (3.18%) 18.78% —
Revenue growth, 5-year CAGR 2.17% 12.31% 5.92%
Net income growth, 5-year CAGR 0.00% 227.39% 0.00%

Health

Metric GAP URBN Apparel Retail median
Debt to equity 0.38 0.00 0.01
Current ratio 1.82 1.58 1.54
Net debt to EBITDA (0.94) (0.95) (0.29)

Dividend

Metric GAP URBN Apparel Retail median
Dividend yield 2.94% — 2.94%
Payout ratio 2.07 0.00 0.00

Size

Metric GAP URBN Apparel Retail median
Market cap 7.66b 6.41b 358.41m

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