Ross Stores (ROST) AI Stock Analysis

• Market Cap: $64.87B
• Dividend Yield: 0.9%
• Average Volume (3M): 2.18M
• Price to Earnings (P/E): 31.3
• Beta (1Y): 0.62
• 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: 323,444,920
• 10 Day Avg. Volume: 1,819,802
• 30 Day Avg. Volume: 2,183,937
• 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: 1.03
• Enterprise Value/Revenue: 3.03
• Enterprise Value/Gross Profit: 10.99
• Enterprise Value/Ebitda: 18.85
• 1Y Price Target: $208.62
• Price Target Upside: 3.52% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 7.2
• Revenue Forecast (FY): $23.79B

• Rating: 80 Outperform
• Price Target: $232.00 ▲(15.12% Upside)
• Action: Reiterated Date: 12/09/25
• Date: Action: Reiterated 12/09/25

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

Free Cash Flow Strength

Sustained FCF growth and strong cash conversion provide durable funding for store expansion, inventory purchasing advantages, debt reduction, and opportunistic share actions. Reliable cash generation underpins operational resilience and long-term capital allocation flexibility across economic cycles.

Scaled Store Expansion & Sales

Aggressive, profitable expansion demonstrates repeatable unit economics and increases buying scale, distribution leverage, and brand reach. Combined with strong comp growth, the rollout supports durable revenue diversification and vendor relationships that sustain the off-price sourcing model.

Durable Profitability and High ROE

Consistently healthy margins and very high ROE indicate efficient cost control, merchandise margin capture, and capital deployment. These structural profitability characteristics support reinvestment and competitive pricing while preserving long-term operating cash flow and returns.

Negative Factors

Rising Distribution Costs & Tariffs

Higher distribution costs from new DC ramp and recurring tariff exposure can structurally compress margins unless offset by productivity gains or price discipline. Persistent logistics or trade-cost pressures would reduce the margin cushion that supports off-price pricing and expansion economics.

Leverage Remains Material

While leverage is currently manageable, a debt-to-equity near 0.84 limits financial flexibility for aggressive buybacks or expansions during downturns. Higher structural leverage raises interest-rate sensitivity and constrains balance-sheet optionality over the medium term.

Limited E-commerce Revenue

Heavy dependence on physical stores and treasure-hunt in-store experience leaves the business exposed to long-term shifts toward omnichannel shopping. Weak digital penetration could cap market reach, hinder younger-customer acquisition, and reduce resilience versus omnichannel competitors.

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

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	Jan 2025	Jan 2024	Jan 2023	Jan 2022	Jan 2021
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: 201.53
• 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 201.53 is above the 20-day moving average (MA) of 194.34, above the 50-day MA of 189.38, and above the 200-day MA of 158.61, indicating a bullish trend. The MACD of 3.84 indicates Negative momentum. The RSI at 70.57 is Negative, neither overbought nor oversold. The STOCH value of 78.88 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	$64.87B	31.34	37.43%	0.90%	3.71%	0.65%
TJX	78 Outperform	$175.08B	32.37	59.13%	1.07%	4.53%	6.52%
GAP	76 Outperform	$10.13B	12.20	25.10%	2.45%	0.29%	3.65%
AEO	74 Outperform	$4.03B	20.51	12.36%	2.09%	-1.15%	-0.98%
URBN	73 Outperform	$5.82B	12.38	19.34%	―	11.09%	51.51%
BURL	68 Neutral	$19.39B	35.31	41.92%	―	6.80%	20.46%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%