Ross Stores (ROST) AI Stock Analysis

• Market Cap: $46.57B
• Dividend Yield: 1.06%
• Average Volume (3M): 3.15M
• Price to Earnings (P/E): 22.4
• Beta (1Y): 0.65
• Revenue Growth: 3.69%
• EPS Growth: 13.71%
• Country: US
• Employees: 107,000
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Apparel - Retail
• EPS (TTM): 1.79
• Shares Outstanding: 328,834,200
• 10 Day Avg. Volume: 2,505,170
• 30 Day Avg. Volume: 3,153,426
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 9.04
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $157.69
• Price Target Upside: 9.99% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17

Ross Stores is well-positioned in the apparel retail sector with strong financial performance and effective operational management. The cautious outlook for FY2025 due to softening sales trends and macroeconomic factors impacts the stock score, but the company's strategic expansion and robust financial health support a positive long-term view. Valuation and technical indicators are moderate, suggesting a balanced risk-reward profile.

Positive Factors

Consumer Behavior

A potentially weakening consumer environment will mean more consumers are likely to trade down to the off-price channel in search of value and the treasure hunt shopping experience.

Store Closures and Market Share

Store closures have benefitted the group over the past years, and the momentum may even increase if the current environment accelerates closures across the retail sector.

Tariffs and Market Disruption

Tariffs are likely to create significant disruption in the market, greatly increasing the availability of product available to off-pricers at attractive prices.

Negative Factors

Consumer Traffic

There is more recent speculation of weaker traffic from Hispanic customers in borderland territories.

Inflation Impact

Ross has a typically lower-income consumer when compared to TJX, with inflation a larger headwind over the last three years.

Leadership Experience

Ross shares continued to slide after Conroy’s appointment due to his lack of experience in off-price, an industry known for home-grown talent.

Ross Stores Business Overview & Revenue Model

Company Description

Ross Stores, Inc. is an S&P 500 and Fortune 500 company headquartered in Dublin, California. It operates under the brand names Ross Dress for Less, the largest off-price apparel and home fashion chain in the United States, and dd's DISCOUNTS. The company specializes in offering significant savings on a wide range of products, including apparel, footwear, accessories, and home décor, compared to traditional department and specialty stores. Ross Stores targets value-conscious customers by providing a constantly changing assortment of high-quality and name-brand merchandise at competitive prices.

How the Company Makes Money

Ross Stores makes money primarily through the sale of discounted merchandise in its retail stores. The company's revenue model is centered around purchasing excess inventory and overruns from manufacturers and other retailers at reduced prices, allowing it to offer products at lower costs than traditional retail stores. This off-price retail model enables Ross to provide significant discounts to consumers while maintaining healthy profit margins. Key revenue streams include the sale of apparel, footwear, accessories, and home-related products. Additionally, the company's substantial store footprint and strategic buying practices contribute to its earnings by leveraging economies of scale and minimizing operational costs. Ross Stores does not rely heavily on e-commerce, focusing instead on the in-store shopping experience to drive sales.

Ross Stores Financial Statement Overview

Summary

Ross Stores showcases a solid financial standing with strong income statement metrics, a stable balance sheet, and healthy cash flow generation. The company demonstrates consistent revenue and profit growth, efficient equity utilization, and strong cash conversion, positioning it well for future expansion and resilience in the discretionary retail market.

Income Statement

Ross Stores has demonstrated robust financial performance with a consistent increase in revenue and profitability. The TTM shows a Gross Profit Margin of 28.0% and a Net Profit Margin of 9.9%, reflecting strong operational efficiency. Revenue growth from the previous year is impressive, and the EBIT and EBITDA margins are healthy at 12.2% and 14.5%, respectively. These metrics indicate a solid and improving income statement performance.

Balance Sheet

Ross Stores maintains a stable balance sheet with a Debt-to-Equity Ratio of 1.09, indicating moderate leverage which is manageable. The Return on Equity (ROE) stands at 40.2%, showcasing efficient use of equity to generate profits. The Equity Ratio of 35.3% reflects a healthy balance between debt and equity, though there is room for improvement in reducing liabilities.

Cash Flow

The company's cash flow position is strong, evidenced by a Free Cash Flow Growth Rate of -3.7%, which is slightly down but remains robust overall. The Operating Cash Flow to Net Income Ratio is 1.15, indicating good cash generation relative to net income. Additionally, the Free Cash Flow to Net Income Ratio is 0.80, showing effective conversion of earnings into free cash flow, supporting liquidity and potential for reinvestment.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
20.38B	18.70B	18.92B	12.53B	16.04B
	Gross Profit
5.58B	4.75B	5.21B	2.69B	4.50B
	EBIT
2.31B	1.99B	2.33B	189.71M	2.15B
	EBITDA
2.97B	2.38B	2.69B	553.96M	2.52B
	Net Income Common Stockholders
1.87B	1.51B	1.72B	85.38M	1.66B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.87B	4.55B	4.92B	4.82B	1.35B
	Total Assets
14.30B	13.42B	13.64B	12.72B	9.35B
	Total Debt
5.75B	5.71B	5.62B	5.73B	3.49B
	Net Debt
875.26M	1.15B	699.77M	913.51M	2.14B
	Total Liabilities
9.43B	9.13B	9.58B	9.43B	5.99B
	Stockholders Equity
4.87B	4.29B	4.06B	3.29B	3.36B
Cash Flow		Free Cash Flow
1.75B	1.04B	1.18B	1.84B	1.62B
	Operating Cash Flow
2.51B	1.69B	1.74B	2.25B	2.17B
	Investing Cash Flow
-762.81M	-654.07M	-557.84M	-405.43M	-554.97M
	Financing Cash Flow
-1.43B	-1.41B	-1.15B	1.70B	-1.68B

Ross Stores Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 143.37
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 143.37 is above the 20-day moving average (MA) of 140.13, above the 50-day MA of 134.02, and above the 200-day MA of 143.22, indicating a bullish trend. The MACD of 2.26 indicates Negative momentum. The RSI at 63.04 is Neutral, neither overbought nor oversold. The STOCH value of 82.76 is Negative, 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
ONON	80 Outperform	$15.61B	56.39	19.62%	―	31.95%	209.45%
TJX	77 Outperform	$143.42B	30.27	61.98%	1.17%	3.95%	10.34%
GAP	73 Outperform	$8.53B	10.41	28.81%	2.64%	1.32%	65.83%
ROST	73 Outperform	$46.57B	22.40	40.28%	1.06%	3.69%	13.71%
AEO	73 Outperform	$1.90B	6.62	18.80%	4.48%	1.27%	96.32%
BURL	70 Outperform	$14.93B	30.42	42.55%	―	9.33%	50.05%
Sector *	61 Neutral	$6.59B	11.77	3.06%	3.98%	2.56%	-20.85%

Ross Stores Corporate Events

Ross Stores Announces CFO Transition Plan for 2025

On February 20, 2025, Ross Stores announced the upcoming retirement of Adam Orvos as Chief Financial Officer, effective September 30, 2025. William Sheehan has been appointed Deputy Chief Financial Officer as of February 16, 2025, and is set to succeed Mr. Orvos on October 1, 2025. The transition is expected to be smooth due to Sheehan’s extensive experience within the company and the retail industry. This leadership change is anticipated to maintain Ross Stores’ strong financial position and ensure continued expertise in financial operations.