Ross Stores (ROST) AI Stock Analysis

• Market Cap: $48.51B
• Dividend Yield: 1.03%
• Average Volume (3M): 3.04M
• Price to Earnings (P/E): 23.4
• Beta (1Y): 0.78
• Revenue Growth: 1.92%
• EPS Growth: 1.50%
• Country: US
• Employees: 107,000
• Sector: Consumer Cyclical
• Sector Strength: 80
• Industry: Apparel - Retail
• EPS (TTM): 1.56
• Shares Outstanding: 327,070,530
• 10 Day Avg. Volume: 4,280,840
• 30 Day Avg. Volume: 3,036,084
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: 2.13
• Enterprise Value/Gross Profit: 7.70
• Enterprise Value/Ebitda: 15.30
• 1Y Price Target: $159.57
• Price Target Upside: 6.17% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

• Rating: 75 Outperform
• Price Target: $166.00 ▲(10.45% Upside)

Ross Stores' strong financial performance and positive technical indicators are significant strengths. However, valuation concerns and challenges from tariffs and operating margin pressures temper the outlook. The new credit facility adds financial flexibility, supporting future growth.

Positive Factors

Earnings Performance

ROST reported 2Q EPS beating estimates on better sales and gross margins.

Market Position

Ross Stores remains favorably positioned in a growing off-price pie with market share opportunity from department store share loss and white space remaining for unit growth.

Sales Performance

Sales rebounded in July, driven by strong early back-to-school selling, with positive sales in nearly every merchandise category.

Negative Factors

Competitive Performance

Ross Stores continues to underperform compared to its peers and remains the least preferred off-price retailer according to the analyst.

Earnings Guidance

The new guidance is slightly more cautious, particularly on margins, despite management's optimism on current trends.

Strategic Challenges

Ross Stores is grappling with specific challenges, such as a GM-dilutive strategy and exposure to low-income consumers, which may be affecting its performance.

Ross Stores Business Overview & Revenue Model

Company Description

Ross Stores, Inc. is a leading off-price retailer in the United States, operating the Ross Dress for Less and dd's Discounts brands. The company is focused on providing a wide variety of apparel, footwear, accessories, and home goods at discounted prices. Ross Stores caters to value-conscious consumers by offering brand-name merchandise at significant savings compared to traditional department stores, primarily targeting customers looking for quality products at lower prices.

How the Company Makes Money

Ross Stores generates revenue primarily through the sale of discounted apparel and home goods in its retail locations. The company's revenue model is based on purchasing excess inventory and closeout merchandise from manufacturers and wholesalers at reduced prices, which allows them to sell these items at lower prices while maintaining healthy profit margins. Key revenue streams include sales from its Ross Dress for Less stores and dd's Discounts locations. Additionally, Ross benefits from its ability to quickly adapt to changing market trends, stock a rotating selection of products, and attract a loyal customer base seeking value. The company's efficient supply chain and inventory management practices further enhance its profitability, enabling it to minimize markdowns and maximize sales of in-demand items.

Ross Stores Financial Statement Overview

Summary

Ross Stores exhibits strong financial health with consistent revenue growth, solid profitability margins, and efficient cash flow management. The balance sheet shows stable leverage, though monitoring of debt levels is recommended.

Income Statement

Ross Stores has shown strong financial performance with consistent revenue growth. The TTM (Trailing-Twelve-Months) data indicates a healthy gross profit margin of 27.8% and a solid net profit margin of 9.8%. The EBIT margin at 12.2% and EBITDA margin at 15.0% reflect efficient operational management. These metrics are indicative of robust profitability and operational efficiency.

Balance Sheet

The balance sheet reveals a stable financial position with a debt-to-equity ratio of 0.86, indicating moderate leverage. The return on equity (ROE) is impressive at 35.6%, highlighting effective use of shareholder investments. An equity ratio of 40.9% suggests a balanced capital structure, though the company should monitor its debt levels to maintain financial health.

Cash Flow

Ross Stores demonstrates strong cash flow management with a free cash flow to net income ratio of 0.77, indicating efficient cash generation relative to earnings. The operating cash flow to net income ratio is healthy at 1.15, showcasing effective cash conversion. However, a slight decrease in free cash flow growth rate from previous periods needs attention.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.50B	21.13B	20.38B	18.70B	18.92B	12.53B
Gross Profit	5.94B	5.87B	5.58B	4.75B	5.21B	2.69B
EBITDA	2.99B	3.27B	2.97B	2.46B	2.69B	558.61M
Net Income	2.06B	2.09B	1.87B	1.51B	1.72B	85.38M
Balance Sheet
Total Assets	14.50B	14.91B	14.30B	13.42B	13.64B	12.72B
Cash, Cash Equivalents and Short-Term Investments	3.85B	4.73B	4.87B	4.55B	4.92B	4.82B
Total Debt	5.07B	5.68B	5.75B	5.71B	5.62B	5.73B
Total Liabilities	8.48B	9.40B	9.43B	9.13B	9.58B	9.43B
Stockholders Equity	6.01B	5.51B	4.87B	4.29B	4.06B	3.29B
Cash Flow
Free Cash Flow	1.68B	1.64B	1.75B	1.04B	1.18B	1.84B
Operating Cash Flow	2.47B	2.36B	2.51B	1.69B	1.74B	2.25B
Investing Cash Flow	-712.83M	-637.46M	-762.81M	-654.07M	-557.84M	-405.43M
Financing Cash Flow	-2.58B	-1.86B	-1.43B	-1.41B	-1.15B	1.70B

Ross Stores Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 150.29
• 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 150.29 is above the 20-day moving average (MA) of 145.63, above the 50-day MA of 137.21, and above the 200-day MA of 140.64, indicating a bullish trend. The MACD of 2.98 indicates Positive momentum. The RSI at 67.04 is Neutral, neither overbought nor oversold. The STOCH value of 66.13 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
TJX	79 Outperform	$152.48B	30.92	59.75%	1.17%	4.14%	―
ROST	75 Outperform	$48.51B	23.43	37.98%	1.03%	1.92%	1.50%
AEO	74 Outperform	$2.11B	12.79	12.19%	3.78%	-0.95%	-10.51%
BURL	73 Outperform	$17.60B	34.25	44.13%	―	8.29%	38.09%
GAP	72 Outperform	$8.05B	9.37	29.16%	2.83%	1.07%	28.03%
ONON	69 Neutral	$14.58B	96.79	9.66%	―	39.16%	-14.16%
Sector *	61 Neutral	$17.75B	12.56	-5.49%	3.02%	1.43%	-14.12%

Ross Stores Corporate Events

Ross Stores Establishes New $1.3 Billion Credit Facility

Ross Stores, Inc. announced on June 27, 2025, the establishment of a new senior unsecured revolving credit facility, the 2025 Credit Facility, which provides up to $1.3 billion in borrowing availability. This facility replaces the previous credit facility from February 2022, maintaining similar terms and borrowing capacity limits, and includes options for extension and increased size. The new facility is expected to enhance Ross Stores’ financial flexibility and support its operational needs, with no outstanding borrowings reported on the effective date.

Ross Stores Concludes Annual Stockholders Meeting

Ross Stores held its Annual Meeting of Stockholders on May 21, 2025, where stockholders voted on three key matters. The election of 11 directors for a one-year term was approved, executive compensation received advisory approval, and Deloitte & Touche LLP was ratified as the independent public accounting firm for the fiscal year ending January 31, 2026.