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 USD 218 versus our fair value of USD 159; the high endpoint is presented separately as potential value of USD 197. 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 USD 159 and a potential value of USD 197. 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 USD 218 versus fair value of USD 159; potential value is USD 197. 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 USD 159, the potential value of USD 197, and the price recorded at analysis (USD 218).
Bull: The off-price value proposition captures massive market share from department stores, accelerating top-line growth and expanding margins above historical averages.
สิ่งที่จะเปลี่ยนมุมมองของเรา
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.
ข้อแนะนำของบริษัท
Sell. Current valuation implies ~27% downside to our $158.93 mid-point due to required multiple normalization.
ภาพรวมบริษัท
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 กรณีลบEN
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.
ปัจจุบัน:7.7% for the period ended 2026-01-31
แจ้งเตือนหากFalls below 0.0% for two consecutive quarters
02
§3 ความได้เปรียบเชิงแข่งขันEN
Narrow
Scale economies in inventory sourcing driving high ROIC (19.9%)
Off-price value proposition capturing trade-down retail traffic
กำไรเชิงเศรษฐกิจ
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
ภัยคุกคามที่รู้ต่อความได้เปรียบ
ภัยคุกคาม
ความรุนแรง
ไทม์ไลน์
การบรรเทา
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.
ตามคาด
Hold
ทริกเกอร์: 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.
ต่ำกว่าคาด
Reassess
ทริกเกอร์: 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.
คุณภาพกำไร
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.
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 อุตสาหกรรมและวัฏจักรEN
ระยะของวัฏจักร
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.
วัฏจักรขาขึ้น
Consumers trading down to off-price retail during economic softening drives structural market share gains.
วัฏจักรขาลง
Severe inflation destroying discretionary spend for lower-income tiers offsets trade-down benefits.
การวางตำแหน่ง
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 การจัดการสถานะEN
การกำหนดขนาด
Avoid allocation.
ความเสี่ยง
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.
ทรานช์เข้าซื้อ
ระดับ
การกระทำ
เหตุผล
Current / pullbacks
ทรานช์ขายออก
ระดับ
การกระทำ
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 มุมมองนักลงทุนEN
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 ข้อแนะนำสุดท้ายEN
การกระทำ
ขาย
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.
ปัจจุบัน:20.0% as of the report's 2026-05-20 analysis date
แจ้งเตือนหากDrops 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.
ปัจจุบัน:1.411 as of the report's 2026-05-20 analysis date
แจ้งเตือนหากDeclines 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.
ปัจจุบัน:11.9% for the period ended 2026-01-31
แจ้งเตือนหากFalls 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.
ปัจจุบัน:27.7% for the period ended 2026-01-31
แจ้งเตือนหากDeclines 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.
ปัจจุบัน20.0% as of the report's 2026-05-20 analysis date
ทำไมจึงสำคัญ
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.
ปัจจุบัน1.411 as of the report's 2026-05-20 analysis date
ทำไมจึงสำคัญ
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.
