TGM's two-stage DCF values The Gap, Inc. (GAP) between $27.65 and $40.36 depending on assumptions, with a base case of $32.46. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth), fading to 2.5% long-run; the discount rate (11.5%) reflects its beta.
What would today's price require?
$19.01 is justified only if free cash flow grows about -12.7% a year (fading to 2.5% long-run) at a 11.5% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 12.5% | $27.65 |
| Base case | 2.4%/yr | 11.5% | $32.46 |
| Optimistic | 5.4%/yr | 10.5% | $40.36 |
| Third-party model estimate (FMP) | independent reference · retrieved Jul 26, 2026 · assumptions not provided | $65.33 | |
The FMP figure is a third-party point estimate. Its cash-flow forecast, discount rate, terminal growth, and valuation date are not included in the stored response, so TGMCharts presents it only as a reference—not as an intrinsic-value conclusion or price target.
Current Price
$19.01
Market-Implied Growth
-12.7%/yr
vs +2.6% 5Y actual
Model Scenario Range
$27.65 – $40.36
model output — not a price target
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for GAP (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $931.0M · 0.36B shares · net cash $1.1B
Estimated Fair Value
$32.46
+70.8% vs $19.01
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 2.4%/yr FCF growth and 10-year horizon fixed. Green = above today's $19.01; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 9.5% | $37.16 | $38.88 | $40.84 | $43.09 | $45.72 |
| 10.5% | $33.36 | $34.66 | $36.13 | $37.78 | $39.67 |
| 11.5% | $30.31 | $31.33 | $32.46 | $33.72 | $35.13 |
| 12.5% | $27.82 | $28.64 | $29.53 | $30.51 | $31.60 |
| 13.5% | $25.75 | $26.41 | $27.13 | $27.92 | $28.78 |
