GAP (NYSE:GAP) and Torrid (NYSE:CURV) Head-To-Head Review

GAP (NYSE:GAP) and Torrid (NYSE:CURV) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Volatility and Risk

GAP has a beta of 2.29, suggesting that its stock price is 129% more volatile than the S&P 500. Comparatively, Torrid has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500.

Insider & 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 insiders. Comparatively, 5.9% of Torrid shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares GAP and Torrid”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GAP	$15.37 billion	0.56	$844.00 million	$2.24	10.39
Torrid	$1.10 billion	0.11	$16.32 million	($0.01)	-122.50

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.

Analyst Recommendations

This is a breakdown of current ratings and target prices for GAP and Torrid, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	0	4	11	2	2.88
Torrid	3	4	1	0	1.75

GAP presently has a consensus target price of $30.46, suggesting a potential upside of 30.85%. Torrid has a consensus target price of $1.44, suggesting a potential upside of 17.55%. Given GAP’s stronger consensus rating and higher probable upside, equities research analysts plainly believe GAP is more favorable than Torrid.

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%	23.54%	6.78%
Torrid	-0.18%	-1.69%	-0.43%

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.