Analyzing GAP (NYSE:GAP) and Torrid (NYSE:CURV)
by Mitch Edgeman · The Markets DailyGAP (NYSE:GAP – Get Free Report) and Torrid (NYSE:CURV – Get Free Report) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.
Insider and Institutional Ownership
58.8% of GAP shares are held by institutional investors. Comparatively, 81.8% of Torrid shares are held by institutional investors. 30.6% of GAP shares are held by company insiders. Comparatively, 5.9% of Torrid shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for GAP and Torrid, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| GAP | 0 | 5 | 10 | 2 | 2.82 |
| Torrid | 4 | 3 | 1 | 0 | 1.63 |
GAP currently has a consensus price target of $30.62, suggesting a potential upside of 28.12%. Torrid has a consensus price target of $1.44, suggesting a potential downside of 11.55%. Given GAP’s stronger consensus rating and higher probable upside, research analysts plainly believe GAP is more favorable than Torrid.
Volatility & Risk
GAP has a beta of 2.29, meaning that its stock price is 129% more volatile than the S&P 500. Comparatively, Torrid has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500.
Profitability
This table compares GAP and Torrid’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| GAP | 5.31% | 22.98% | 6.70% |
| Torrid | -0.70% | -1.69% | -1.66% |
Valuation & Earnings
This table compares GAP and Torrid”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| GAP | $15.37 billion | 0.58 | $816.00 million | $2.15 | 11.11 |
| Torrid | $1.00 billion | 0.16 | $16.32 million | ($0.01) | -162.80 |
GAP has higher revenue and earnings than Torrid. Torrid is trading at a lower price-to-earnings ratio than GAP, indicating that it is currently the more affordable of the two stocks.
Summary
GAP beats Torrid on 14 of the 15 factors compared between the two stocks.
About GAP
Gap, Inc. operates as a global apparel retail company, which offers clothing, apparel, accessories, and personal care products for men, women, and children. The firm operates through the following segments: Gap Global, Old Navy Global, Banana Republic Global, Athleta, and Other. The Gap Global segment includes apparel and accessories for men and women under the Gap brand, along with the GapKids, BabyGap, GapMaternity, GapBody, and GapFit collections. The Old Navy Global segment offers clothing and accessories for adults and children. The Banana Republic Global segment provides clothing, eyewear, jewelry, shoes, handbags, and fragrances. The Athleta segment offers fitness apparel for women. The company founded by Donald G. Fisher and Doris F. Fisher in July 1969 and is headquartered in San Francisco, CA.
About Torrid
Torrid Holdings Inc. operates in women’s plus-size apparel and intimates market in North America. The company designs, develops, and merchandises its products under the Torrid, Torrid Curve, CURV, and Lovesick brand names. It is involved in the sale of tops, bottoms, dresses, denims, activewear, intimates, sleep wear, swim wear, and outerwear products; and non-apparel products comprising accessories, footwear, and beauty products. The company sells its products directly to consumers through its e-commerce platform and its physical stores. Torrid Holdings Inc. was incorporated in 2019 and is headquartered in City Of Industry, California.