Why doesn't gratis change its ending to match el regalo?
While most adjectives change their ending to match the noun's gender and number (like caro or cara), gratis (free) is a special word that never changes. It stays exactly the same whether the noun is masculine, feminine, singular, or plural.
Why do we use es instead of está for 'is'?
We use es (a form of the verbser) because the cost of an item—like being expensive or free—is treated as a basic characteristic or fact about it. We use está for temporary states or locations, but descriptions like price use ser.
Why is there no word for 'it' before the second es?
In Spanish, you don't need to use a word for 'it' if we already know what you are talking about. The first part of the sentence establishes that we are discussing el regalo, so the second es just means 'it is' all on its own.