Gap Inc (GAP) is undervalued and Ross Stores Inc (ROST) is overvalued.
Against our estimates of intrinsic value, GAP trades at the wider discount: a margin of safety of +49%, against -73% for ROST.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 10.1% (average of 3 methods) values the shares at $41.67; the price of $21.46 is 49% below that value, and 72% of that value comes from beyond year five.
Leak Score 100/100 on 3 of 12 signals
Discounting its cash flows at 9.4% (average of 3 methods) values the shares at $134.75; the price of $232.51 is 73% above that value, and 75% of that value comes from beyond year five.
Leak Score 76/100 on 9 of 12 signals
| Metric | GAP | ROST |
|---|---|---|
| Verdict | Undervalued | Overvalued |
| Price | $21.46 | $232.51 |
| Intrinsic value | $41.67 | $134.75 |
| Margin of safety | +49% | -73% |
| Leak Score | 100/100 (3/12) | 76/100 (9/12) |
| Market cap | $7.5B | $74.3B |
| Revenue growth, 5 years | 2.2% | 12.7% |
| Operating margin | 10.8% | 12.7% |
| Net margin | 8.1% | 10.8% |
| Return on equity | 33.8% | 42.6% |
| Debt to equity | 1.45 | 0.70 |
| P/E | 6.4x | 28.1x |
| Forward P/E | 8.1x | 25.7x |
| P/B | 1.9x | 11.0x |
| Dividend yield | 3.2% | 0.8% |