Ross Stores (ROST) AI Stock Analysis

• Market Cap: $57.85B
• Dividend Yield: 0.92%
• Average Volume (3M): 2.77M
• Price to Earnings (P/E): 27.8
• Beta (1Y): 0.66
• Revenue Growth: 3.71%
• EPS Growth: 0.65%
• Country: US
• Employees: 107,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): 1.58
• Shares Outstanding: 325,226,260
• 10 Day Avg. Volume: 2,952,028
• 30 Day Avg. Volume: 2,771,599
• PEG Ratio: 1.72
• Price to Book (P/B): 8.98
• Price to Sales (P/S): 2.34
• P/FCF Ratio: 30.22
• Enterprise Value/Market Cap: 0.91
• Enterprise Value/Revenue: 2.38
• Enterprise Value/Gross Profit: 8.65
• Enterprise Value/Ebitda: 14.84
• 1Y Price Target: $183.43
• Price Target Upside: 3.62% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 80 Outperform
• Price Target: $205.00 ▲(15.81% Upside)

Ross Stores' strong financial performance and positive earnings call are the most significant factors driving the score. The company's effective cash management and robust sales growth highlight its operational efficiency and strategic positioning. While the technical indicators suggest overbought conditions, the overall outlook remains positive due to the company's strategic initiatives and leadership transition.

Positive Factors

Revenue Growth

The strong revenue growth reflects Ross Stores' successful expansion and effective branded strategy, enhancing its market position and driving long-term sales increases.

Cash Generation

Strong cash generation supports Ross Stores' ability to invest in growth opportunities, reduce debt, and return capital to shareholders, ensuring financial stability.

Leadership Transition

The leadership transition to Bjorklund, with his extensive experience, is expected to sustain strategic growth and strengthen Ross Stores' market positioning.

Negative Factors

Tariff-Related Costs

Ongoing tariff-related costs could pressure margins, affecting profitability and necessitating strategic adjustments to mitigate long-term financial impacts.

Distribution Costs

Increased distribution costs may strain operational efficiency, requiring improved logistics management to sustain margin levels and competitive pricing.

Debt Levels

While leverage is manageable, further debt reduction could enhance financial stability, reducing interest burdens and increasing strategic flexibility.

Ross Stores Business Overview & Revenue Model

Company Description

Ross Stores, Inc. operates as a discount retailer in the United States, primarily through its Ross Dress for Less and dd's Discounts brands. The company offers a wide range of products, including apparel, footwear, accessories, and home goods, all at significantly reduced prices compared to traditional department stores. Ross Stores focuses on providing value to customers by sourcing merchandise from manufacturers and retailers at discounted rates, allowing them to sell high-quality products at lower prices.

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

Ross Stores exhibits strong financial performance with consistent revenue growth, robust profitability, and effective cash management. The company maintains a stable balance sheet with manageable leverage, although further debt reduction could enhance financial stability. The positive cash flow trends underscore the company's operational efficiency and financial health, positioning it well for future growth.

Income Statement

Ross Stores has demonstrated strong revenue growth with a TTM increase of 2.46% and consistent profitability, reflected in a solid net profit margin of 9.47% and an EBIT margin of 9.57%. The company has maintained a healthy EBITDA margin of 13.15%, indicating efficient operational management. However, the gross profit margin appears understated in the TTM data, likely due to a reporting error, as historical data shows a more robust margin.

Balance Sheet

The balance sheet shows a stable financial position with a debt-to-equity ratio of 0.84, indicating manageable leverage. The return on equity is strong at 36.28%, showcasing effective use of shareholder funds. The equity ratio of 38.18% suggests a balanced capital structure, though there is room for improvement in reducing debt levels further.

Cash Flow

Ross Stores has shown impressive free cash flow growth of 16.97% in the TTM, reflecting strong cash generation capabilities. The operating cash flow to net income ratio of 0.56 indicates good cash conversion, while the free cash flow to net income ratio of 0.70 suggests efficient cash management. These metrics highlight the company's ability to generate and manage cash effectively.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.03B	21.13B	20.38B	18.70B	18.92B	12.53B
Gross Profit	6.07B	5.87B	5.58B	4.75B	5.21B	2.69B
EBITDA	3.54B	3.27B	2.97B	2.46B	2.69B	558.61M
Net Income	2.09B	2.09B	1.87B	1.51B	1.72B	85.38M
Balance Sheet
Total Assets	15.41B	14.91B	14.30B	13.42B	13.64B	12.72B
Cash, Cash Equivalents and Short-Term Investments	4.06B	4.73B	4.87B	4.55B	4.92B	4.82B
Total Debt	5.19B	5.68B	5.75B	5.71B	5.62B	5.73B
Total Liabilities	9.53B	9.40B	9.43B	9.13B	9.58B	9.43B
Stockholders Equity	5.88B	5.51B	4.87B	4.29B	4.06B	3.29B
Cash Flow
Free Cash Flow	1.96B	1.64B	1.75B	1.04B	1.18B	1.84B
Operating Cash Flow	2.79B	2.36B	2.51B	1.69B	1.74B	2.25B
Investing Cash Flow	-741.71M	-637.46M	-762.81M	-654.07M	-557.84M	-405.43M
Financing Cash Flow	-2.33B	-1.86B	-1.43B	-1.41B	-1.15B	1.70B

Ross Stores Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 177.02
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 177.02 is above the 20-day moving average (MA) of 170.14, above the 50-day MA of 161.73, and above the 200-day MA of 144.05, indicating a bullish trend. The MACD of 5.13 indicates Negative momentum. The RSI at 73.14 is Negative, neither overbought nor oversold. The STOCH value of 64.49 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	80 Outperform	$57.85B	27.81	37.43%	0.92%	3.71%	0.65%
TJX	79 Outperform	$170.70B	33.96	58.40%	1.07%	4.53%	6.52%
URBN	78 Outperform	$6.81B	14.53	19.34%	―	11.09%	51.51%
AEO	77 Outperform	$3.80B	19.33	12.36%	2.09%	-1.15%	-0.98%
GAP	76 Outperform	$9.88B	11.90	25.10%	2.47%	0.29%	3.65%
BURL	68 Neutral	$17.10B	30.21	41.92%	―	6.80%	20.46%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Ross Stores Corporate Events

Ross Stores Announces Leadership Transition

Ross Stores announced a leadership transition with Michael Balmuth stepping down as Executive Chairman on January 31, 2026, and retiring from the Board. K. Gunnar Bjorklund, a long-serving Board member, will succeed him as Chairman effective February 1, 2026. This change reflects a strategic move to ensure continued growth and strong market positioning, with Bjorklund’s extensive experience in the off-price retail sector being seen as a significant asset for the company’s future. The transition highlights Balmuth’s impactful leadership, which transformed Ross into a leading retailer with over 2,200 stores nationwide.