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Quote this valuation with its source: Fair value, Potential value and the price at analysis.
FAQ
ROST — frequently asked questions
Is Ross Stores, Inc. overvalued?
In our latest published analysis dated 2026-05-20, ROST looks meaningfully overvalued. The price recorded at analysis is 218 USD versus our fair value of 159 USD; the high endpoint is presented separately as potential value of 197 USD. That implies roughly 27.0% downside to fair value at that date.
Our latest published report, analyzed 2026-05-20, gives ROST a fair value of 159 USD and a potential value of 197 USD. The conclusion is triangulated across multiple valuation models and weighted by reliability for Ross Stores, Inc.'s archetype; it is a dated research output, not a live price.
Should I buy ROST now?
Our latest published rating for ROST, analyzed 2026-05-20, is Sell. Ross Stores, Inc. looks meaningfully overvalued at the analysis-date price of 218 USD versus fair value of 159 USD; potential value is 197 USD. This is research for educational purposes, not personalized investment advice.
What are the biggest risks for ROST?
The dedicated bear-case section in our report analyzed 2026-05-20 documents Ross Stores, Inc.'s material risks, evidence, thresholds, and thesis-invalidation conditions. Scenario-specific explanations remain in that section so the report does not repeat or decontextualize them elsewhere.
What is ROST's rating?
Our latest published rating for ROST, analyzed 2026-05-20, is Sell, with a published moat assessment of 6.5/10 (Narrow). It reflects our fair value of 159 USD, the potential value of 197 USD, and the price recorded at analysis (218 USD).
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§1 Resumen ejecutivoEN
Respuesta en 30 segundosSell
Precio frente a valor
Precio
$217.71
Valor razonable
$158.93
Valor potencial
$197.48
A fecha de
Fecha de cotización no registrada
Por qué puede funcionar
Bull: The off-price value proposition captures massive market share from department stores, accelerating top-line growth and expanding margins above historical averages.
Qué cambiaría nuestra opinión
Severe Margin Compression: Freight and supply chain costs compress operating margins structurally below historical averages, breaking the stable 12.26% margin thesis.
Ross Stores is a highly profitable off-price retailer with a long runway for store expansion, strong ROIC, and excellent cash conversion. However, current valuation multiples demand flawless execution and leave limited margin of safety. The business is fundamentally exceptional but priced beyond perfection.
Ross Stores is a highly profitable off-price retailer with a long runway for store expansion, strong ROIC, and excellent cash conversion. However, current demand flawless execution and leave limited . The business is fundamentally exceptional but priced beyond perfection.
Scale economies in inventory sourcing driving high ROIC (19.9%)
Off-price value proposition capturing trade-down
Off-price value proposition capturing trade-down retail traffic
Cycle upside
Consumers trading down to off-price retail during economic softening drives structural market share gains.
Recomendación de la casa
Sell. Current valuation implies ~27% downside to our $158.93 mid-point due to required multiple normalization.
Descripción general de la empresa
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 brands in the United States. The company offers designer apparel, accessories, footwear, and home-fashioned products for the entire family. It sells its products to middle income households and households with lower to more moderate incomes. Ross Stores, Inc. was incorporated in 1957 and is headquartered in Dublin, California.
§2 Caso bajistaEN
Macroeconomic pressure severely impacts the discretionary spending power of the core lower-to-middle income demographic. Compounded by supply chain and freight cost inflation, operating margins compress structurally below 12.26%, destroying the current high-multiple premium.
Persistent contraction in top-line growth indicates weakening consumer demand among core demographic shoppers and reduced store foot traffic, undermining the retailer's off-price store expansion strategy and eroding fixed-cost operating leverage across its retail distribution network.
Actual:7.7% for the period ended 2026-01-31
Alerta siFalls below 0.0% for two consecutive quarters
02
§3 Foso competitivoEN
Narrow
Scale economies in inventory sourcing driving high ROIC (19.9%)
Off-price value proposition capturing trade-down retail traffic
Beneficio económico
Economic profit is supported when reported returns exceed the company cost-of-capital hurdle.
6.5/ 10
Narrow
Sources of advantage
01Scale economies in inventory sourcing driving high ROIC (19.9%) — Scale economies in inventory sourcing driving high ROIC (19.9%)Moderate
02Off-price value proposition capturing trade-down retail traffic — Off-price value proposition capturing trade-down retail trafficModerate
Amenazas conocidas al foso
Amenaza
Severidad
Cronograma
Mitigación
Persistent inflationary pressures on core lower-to-middle income demographic
medium
Monitor
Monitor the threat against the report checkpoints.
The highlighted base cell is anchored to valuation synthesis sensitivity reference ($151.63). It is the reference value for this grid, not a separate standalone fair-value claim.
The off-price value proposition captures massive market share from department stores, accelerating top-line growth and expanding margins above historical averages.
If near-term revenue growth misses the 7.8% target, expect immediate multiple contraction. If margins slip below 12.26%, the $158.93 mid-point will require downward revision.
En línea
Hold
Disparador: In-line results
If near-term revenue growth misses the 7.8% target, expect immediate multiple contraction. If margins slip below 12.26%, the $158.93 mid-point will require downward revision.
Fallo
Reassess
Disparador: Downside surprise
If near-term revenue growth misses the 7.8% target, expect immediate multiple contraction. If margins slip below 12.26%, the $158.93 mid-point will require downward revision.
Calidad de los beneficios
If near-term revenue growth misses the 7.8% target, expect immediate multiple contraction. If margins slip below 12.26%, the $158.93 mid-point will require downward revision.
Warning level: Falls below 0.0% for two consecutive quarters. Persistent contraction in top-line growth indicates weakening consumer demand among core demographic shoppers and reduced store foot traffic, undermining the retailer's off-price store expansion strategy and eroding fixed-cost operating leverage across its retail distribution network.
Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.
Ingresos más recientes22,8 mil MCAGR de ingresos +4,7 %
Margen operativo11,9 %5 periodos fiscales
Flujo de caja libre más reciente2207,6 MFY2026
Deuda neta617,9 MFY2026
Desglose de la cuenta de resultadosCómo la escala del negocio se convierte en beneficio declarado.
StockMarketAgent.AI
Ingresos22,8 mil MCoste de ventas−16,4 mil MBeneficio bruto6303,3 MGastos operativos−3595,9 MBeneficio operativo2707,4 MPartidas no operativas e impuestos−562,3 MBeneficio neto2145 M
Datos del historial financiero
Ingresos
22.750.559.000
Coste de ventas
16.447.256.000
Beneficio bruto
6.303.303.000
Gastos operativos
3.595.946.000
Beneficio operativo
2.707.357.000
Partidas no operativas e impuestos
-562.313.000
Beneficio neto
2.145.044.000
Resumen del balanceCómo se mantienen y financian los activos declarados en el período seleccionado.
StockMarketAgent.AI
Composición de activosFinanciado por
Activos totales15,5 mil MEfectivo4594,4 MActivos corrientes7640,1 MPasivos totales9361,3 MPasivos corrientes4827,2 MPatrimonio neto6187,4 M
Datos del desglose del balance
Activos totales
15.548.737.000
Efectivo
4.594.392.000
Activos corrientes
7.640.097.000
Pasivos totales
9.361.294.000
Pasivos corrientes
4.827.180.000
Patrimonio neto
6.187.443.000
Ingresos y beneficiosCómo la escala del negocio se convierte en beneficio declarado.
Efectivo y deudaLiquidez disponible frente al endeudamiento total.
Generación de efectivoFlujo de caja operativo frente al flujo de caja libre.
RentabilidadEvolución de los márgenes bruto, operativo y neto.
Datos financieros puntuales utilizados en el análisis del 2026-05-20.
Datos del historial financiero
Período
Ingresos
EBITDA
Beneficio neto
Flujo de caja operativo
Flujo de caja libre
Capex
Depreciación y amortización
Compensación basada en acciones
Recompras de acciones
Dividendos pagados
Emisión neta de deuda
Flujo de inversión
Flujo de financiación
Efectivo inicial
Efectivo final
Efectivo e inversiones
Deuda total
Margen operativo
ROIC
WACC
Diferencial ROIC−WACC
2022-01-31
18,9 mil M
2694,4 M
1722,6 M
1738,8 M
1181 M
557,8 M
360,7 M
134,2 M
707,3 M
405,1 M
-65 M
—
—
—
—
4922,4 M
5622,1 M
12,3 %
—
6,3 %
—
2023-01-31
18,7 mil M
2462,7 M
1512 M
1689,4 M
1035,3 M
654,1 M
394,7 M
121,9 M
998,9 M
431,3 M
0
—
—
—
—
4551,9 M
5706,4 M
10,6 %
—
8,0 %
—
2024-01-31
20,4 mil M
2965,3 M
1874,5 M
2514,5 M
1751,7 M
762,8 M
419,4 M
145,5 M
998,6 M
454,8 M
0
—
—
—
—
4872,4 M
5747,7 M
11,3 %
—
8,7 %
—
2025-01-31
21,1 mil M
3267,3 M
2090,7 M
2357 M
1636,9 M
720,1 M
446,8 M
156,3 M
1136,1 M
488,7 M
-250 M
—
—
—
—
4730,7 M
5682,4 M
12,2 %
—
9,4 %
—
2026-01-31
22,8 mil M
3389,5 M
2145 M
3026,9 M
2207,6 M
819,3 M
509,4 M
175,4 M
1129,9 M
528,1 M
-700 M
—
—
—
—
4594,4 M
5212,3 M
11,9 %
—
—
—
§9 Comparación de valoración con pares
Valor razonableReport-date price
Ross Stores, Inc.ROST
Precio / valor razonable
Valor razonable158,93 US$Report-date price217,71 US$
Fecha de evaluación
Ventaja competitivaNarrow
Cuadro de mando de inversión62 / 100
The TJX Companies, Inc.TJX
Precio / valor razonable
Valor razonable112,24 US$Report-date price130,06 US$
Fecha de evaluación
Ventaja competitivaNarrow
Cuadro de mando de inversión67 / 100
Lululemon Athletica Inc.LULU
Precio / valor razonable
Valor razonable228,48 US$Report-date price119,22 US$
Fecha de evaluación
Ventaja competitivaNarrow
Cuadro de mando de inversión68 / 100
Ross Stores, Inc.ROST
Precio / valor razonable
Valor razonable158,93 US$Report-date price217,71 US$
ROST trades at 26.5x forward earnings against a peer median of 26.4x; EV/EBITDA of 21.5x against a peer median of 18.5x; 6 peers.
§10 Industria y cicloEN
Fase del ciclo
Expansion
Investment phase active. Reinvestment rate at 28.3% and Capex at 1.6x D&A confirm ongoing physical footprint and supply chain capacity expansion.
Ciclo alcista
Consumers trading down to off-price retail during economic softening drives structural market share gains.
Ciclo bajista
Severe inflation destroying discretionary spend for lower-income tiers offsets trade-down benefits.
Posicionamiento
Investment phase active. Reinvestment rate at 28.3% and Capex at 1.6x D&A confirm ongoing physical footprint and supply chain capacity expansion.
§11 Gestión de posiciónEN
Tamaño de posición
Avoid allocation.
Riesgo
Liquidate existing holdings. The 34% premium to our intrinsic value and the clustering of primary models around $151-$152 heavily skew the risk-reward downward.
Tramos de entrada
Nivel
Acción
Por qué
Current / pullbacks
Tramos de salida
Nivel
Acción
Thesis break
Liquidate existing holdings. The 34% premium to our intrinsic value and the clustering of primary models around $151-$152 heavily skew the risk-reward downward.
§12 Perspectivas de inversoresEN
Bull view
Buy
Upside case depends on the report valuation range and named growth catalysts.
Base view
Sell
The intrinsic valuation models cluster tightly around $151-$152, suggesting the market's $217 price tag is driven by unsustainable multiple expansion.
§14 Recomendación finalEN
Acción
Vender
Sell. Our $158.93 mid-point represents a 27% downside. The gap relative to aggressive internal valuation anchors (~$241) is driven entirely by our normalization of the terminal multiple to 20x and proper accounting for the 1.6x Capex/D&A reinvestment drag.
Reassess the thesis against the named valuation, risk, and quarterly checkpoint evidence in this report.
§15Your notes
Capture your own thesis, position size, and follow-up questions. Stays on this device, only you can see it.
A sharp reduction in capital efficiency signals inventory buildup, aggressive promotional markdowns, or cost deleverage across selling and administrative expenses, which impairs economic value creation and threatens premium return multiples over the cost of capital.
Actual:20.0% as of the report's 2026-05-20 analysis date
Alerta siDrops below 15.0% over any trailing twelve-month period
A drop in cash flow conversion relative to accounting profits highlights working capital absorption or aggressive revenue recognition, reducing available free cash to fund store expansion programs, share buybacks, and dividend distributions.
Actual:1.411 as of the report's 2026-05-20 analysis date
Alerta siDeclines below 1.00x over any trailing twelve-month period
Severe supply chain inflation, freight increases, or wage pressures that compress margins reduce operating profitability, undermining the structural cost advantages of the off-price retail model and eroding the premium multiple assigned to earnings.
Actual:11.9% for the period ended 2026-01-31
Alerta siFalls below 11.0% across two consecutive fiscal quarters
Higher merchandise procurement costs or elevated product markdowns squeeze gross profits, constraining merchandising flexibility and exposing the company to severe margin erosion when competing against traditional department stores and digital retail channels.
Actual:27.7% for the period ended 2026-01-31
Alerta siDeclines below 26.0% over any trailing twelve-month period
Monitor the threat against the report checkpoints.
Growth fades smoothly from 7.86% to 4.5% terminal, margins hold stable at 12.26%, and the current elevated multiple normalizes to 20x.
Actual20.0% as of the report's 2026-05-20 analysis date
Por qué importa
Warning level: Drops below 15.0% over any trailing twelve-month period. A sharp reduction in capital efficiency signals inventory buildup, aggressive promotional markdowns, or cost deleverage across selling and administrative expenses, which impairs economic value creation and threatens premium return multiples over the cost of capital.
Actual1.411 as of the report's 2026-05-20 analysis date
Por qué importa
Warning level: Declines below 1.00x over any trailing twelve-month period. A drop in cash flow conversion relative to accounting profits highlights working capital absorption or aggressive revenue recognition, reducing available free cash to fund store expansion programs, share buybacks, and dividend distributions.
Warning level: Falls below 11.0% across two consecutive fiscal quarters. Severe supply chain inflation, freight increases, or wage pressures that compress margins reduce operating profitability, undermining the structural cost advantages of the off-price retail model and eroding the premium multiple assigned to earnings.
Warning level: Declines below 26.0% over any trailing twelve-month period. Higher merchandise procurement costs or elevated product markdowns squeeze gross profits, constraining merchandising flexibility and exposing the company to severe margin erosion when competing against traditional department stores and digital retail channels.
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Precio / valor razonable
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Cuadro de mando de inversión63 / 100
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