Ross Stores (ROST) AI Stock Analysis

• Market Cap: $67.66B
• Dividend Yield: 0.9%
• Average Volume (3M): 2.63M
• Price to Earnings (P/E): 28.1
• Beta (1Y): 0.60
• Revenue Growth: 3.71%
• EPS Growth: 0.65%
• Country: US
• Employees: 107,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): 2.00
• Shares Outstanding: 323,444,920
• 10 Day Avg. Volume: 3,377,570
• 30 Day Avg. Volume: 2,631,447
• PEG Ratio: 5.96
• Price to Book (P/B): 9.75
• Price to Sales (P/S): 2.65
• P/FCF Ratio: 27.32
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 2.99
• Enterprise Value/Gross Profit: 10.70
• Enterprise Value/Ebitda: 18.98
• 1Y Price Target: $232.92
• Price Target Upside: 11.34% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 7.23
• Revenue Forecast (FY): $24.41B

• Rating: 76 Outperform
• Price Target: $241.00 ▲(15.21% Upside)
• Action: Reiterated Date: 03/05/26
• Date: Action: Reiterated 03/05/26

ROST scores well primarily on strong financial performance (growing revenue, solid profitability, improving leverage, and robust free cash flow) and a positive earnings outlook with raised guidance. Technicals are supportive with an established uptrend. The main offset is valuation (higher P/E with a modest yield), plus some reduced visibility from inconsistent latest-year margin fields.

Positive Factors

Durable off-price business model

Ross's off-price model is structurally durable: buying excess, cancelled, and end-of-season merchandise at below-wholesale costs enables persistent margin advantage and high inventory turnover. The treasure-hunt format drives repeat store visits and deep vendor relationships that support long-term gross-margin resilience.

Sustained revenue growth and scale

Multi-year revenue expansion and recent re-acceleration indicate durable demand capture and successful merchandising. Scale boosts purchasing leverage, improves vendor access, and supports network economics (store replenishment and category breadth), which underpin recurring sales and long-term margin stability.

Strong cash generation and improving leverage

Robust operating and free cash flow provide durable funding for expansion, capex, and shareholder actions while enhancing resilience in downturns. Coupled with declining debt-to-equity over the period, cash generation improves financial flexibility and reduces refinancing risk over a 2–6 month horizon and beyond.

Negative Factors

Meaningful absolute debt level

Although leverage ratios improved, the company still carries sizable absolute debt (~$5.2B). In an economic slowdown or margin compression, that debt weight can constrain discretionary investment, increase interest-cost sensitivity, and limit flexibility for opportunistic buying or aggressive capital returns.

Margin pressure from tariffs and distribution

Persistent tariff and distribution cost pressures (including higher distribution center costs) are structural headwinds to merchandise margin. Even modest deleverage can compound over time in retail; higher logistics and trade costs reduce operating margin levers that underpin the off-price model's profitability.

Limited e-commerce contribution

Ross relies predominantly on physical-store traffic and in-store "treasure-hunt" dynamics. Limited e-commerce scale reduces omnichannel resilience and geographic reach versus peers investing in digital, creating a structural vulnerability if consumer shopping shifts meaningfully toward online purchasing over the medium term.

Ross Stores Business Overview & Revenue Model

Company Description

Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd's DISCOUNTS brand names. Its stores primarily offer apparel, accessories, footwear, and home fashions. The company's Ross Dress for Less stores sell its products at department and specialty stores primarily to middle income households; and dd's DISCOUNTS stores sell its products at department and discount stores for households with moderate income. As of July 5, 2022, it operated approximately 1,950 stores under the Ross Dress for Less and dd's DISCOUNTS name in 40 states, the District of Columbia, and Guam. Ross Stores, Inc. was incorporated in 1957 and is headquartered in Dublin, California.

How the Company Makes Money

Ross Stores generates revenue primarily through the sale of discounted merchandise in its retail stores. The company operates a no-frills business model, which allows it to keep operating costs low and pass savings on to customers. Key revenue streams include sales from clothing, footwear, home decor, and seasonal items. Additionally, Ross Stores benefits from a strong inventory management system that enables the company to quickly respond to market trends and consumer demand. The company's ability to purchase excess inventory from manufacturers and retailers at reduced prices further contributes to its profitability. Significant partnerships with suppliers and manufacturers also enhance their ability to stock a diverse range of products, which attracts a broad customer base and drives sales growth.

Ross Stores Financial Statement Overview

Summary

Strong fundamentals overall: multi-year revenue growth, durable ~9–10% net margins in recent years, improving leverage (debt-to-equity down to ~0.80x), and robust free cash flow (~$2.2B in 2026). Score is tempered by meaningful absolute debt and some inconsistency in the latest-year margin fields that reduces confidence in the most recent operating margin detail.

Income Statement

Revenue has grown steadily from ~$12.5B (2021) to ~$22.8B (2026), with growth re-accelerating in 2024–2026 after a 2023 dip. Profitability has materially improved since 2021, with net margin now in the ~9–10% range and EBITDA margin in the mid-teens (2025) and ~12% (2026). The main weakness is data inconsistency in 2026 margins (gross margin and EBIT margin shown as 0), which limits margin trend confidence for the latest year despite strong earnings.

Balance Sheet

Leverage is moderate and improving: debt-to-equity declined from ~1.74x (2021) to ~0.80x (2026) as equity expanded, which supports balance-sheet resilience. Returns on equity are strong (generally ~33–42% from 2022–2026), indicating efficient capital use. The key risk is still meaningful absolute debt (~$5.2B in 2026) and historically higher leverage in prior years, leaving less flexibility if retail conditions weaken.

Cash Flow

Cash generation is solid and improving: operating cash flow rose to ~$3.0B (2026) and free cash flow to ~$2.2B (2026), with strong free-cash-flow growth in 2026 after a softer 2025. Free cash flow is consistently a healthy portion of earnings (~61–82% of net income across years), supporting quality of profits. A watch item is that operating cash flow coverage is only moderate (~0.41–0.63), implying cash conversion can fluctuate year to year.

Breakdown	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	22.75B	21.13B	20.38B	18.70B	18.92B
Gross Profit	6.36B	5.87B	5.58B	4.75B	5.21B
EBITDA	3.58B	3.27B	2.97B	2.46B	2.69B
Net Income	2.15B	2.09B	1.87B	1.51B	1.72B
Balance Sheet
Total Assets	15.55B	14.91B	14.30B	13.42B	13.64B
Cash, Cash Equivalents and Short-Term Investments	4.59B	4.73B	4.87B	4.55B	4.92B
Total Debt	5.21B	5.68B	5.75B	5.71B	5.62B
Total Liabilities	9.07B	9.40B	9.43B	9.13B	9.58B
Stockholders Equity	6.48B	5.51B	4.87B	4.29B	4.06B
Cash Flow
Free Cash Flow	2.21B	1.64B	1.75B	1.04B	1.18B
Operating Cash Flow	3.03B	2.36B	2.51B	1.69B	1.74B
Investing Cash Flow	-819.27M	-637.46M	-762.81M	-654.07M	-557.84M
Financing Cash Flow	-2.34B	-1.86B	-1.43B	-1.41B	-1.15B

Ross Stores Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 209.19
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ROST, the sentiment is Positive. The current price of 209.19 is above the 20-day moving average (MA) of 205.96, above the 50-day MA of 196.48, and above the 200-day MA of 162.62, indicating a bullish trend. The MACD of 4.26 indicates Positive momentum. The RSI at 59.85 is Neutral, neither overbought nor oversold. The STOCH value of 41.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ROST.

Ross Stores Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ROST	76 Outperform	$67.66B	28.12	36.25%	0.90%	3.71%	0.65%
TJX	76 Outperform	$172.54B	30.68	59.53%	1.07%	4.53%	6.52%
URBN	68 Neutral	$5.86B	13.74	17.66%	―	11.09%	51.51%
GAP	64 Neutral	$8.87B	12.79	22.98%	2.45%	0.29%	3.65%
BURL	62 Neutral	$19.42B	31.09	39.79%	―	6.80%	20.46%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
AEO	54 Neutral	$2.97B	20.90	12.12%	2.09%	-1.15%	-0.98%