ROST trades against a final fair-value range of $120.88-$197.48, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs. Fair value range: low $121, high $197, with mid-point at $159.
Currently screens above fair value, so patience matters more than entry speed.
Fair value
$159
Margin of safety
-37.0%
Confidence
82/100
Moat
6.5/10
Educational analysis only — not financial advice. Always do your own due diligence.
$217.71Price
Low $120.88
Mid $158.93
High $197.48
ROST trades against a final fair-value range of $120.88-$197.48, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs.
Scale economies in inventory sourcing
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.
§2 กรณีลบ
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.
วิธีที่ธีสิสนี้อาจล้มเหลว
Severe Margin Compression
20%· Medium
Freight and supply chain costs compress operating margins structurally below historical averages, breaking the stable 12.26% margin thesis.
FV impact
High
Trigger
12-24 months
Valuation Multiple Deflation
60%· High
Market rerates the stock abruptly from current peak multiples (26.5x forward) to our normalized 20x terminal target, realizing immediate downside.
FV impact
High
Trigger
6-12 months
Unit Economics Saturation
10%· Low
Capex to D&A drops below 1.1x as market saturation limits new store expansion, breaking the 5-year growth path.
FV impact
Medium
Trigger
36-60 months
สัญญาณเตือนล่วงหน้าที่ต้องเฝ้าระวัง
ตัวชี้วัด
ปัจจุบัน
เกณฑ์ทริกเกอร์
Comparable store sales turn negative for two consecutive quarters.
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Deterioration versus the report thesis
ROIC drops below 15% due to inventory mismanagement or SG&A deleverage.
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Deterioration versus the report thesis
Capex to D&A falls below 1.1x without commensurate increase in repurchases.
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Deterioration versus the report thesis
Operating margins fail to hold the 12.26% baseline in quarterly reports.
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Deterioration versus the report thesis
Divergence expands between private calibration estimates and our $151-$152 DCF cluster.
ROST (ROST)'s margin set covers gross margin, operating margin, net margin, and free-cash-flow margin. The five-year trajectory is plotted so the reader can separate cyclical noise from secular trend.
Margin expansion or compression is read against the revenue base: if operating margin expands while revenue grows, that is operating leverage. If gross margin compresses, the cause (mix shift, input costs, pricing) is annotated in the numbers analysis.
Peer-relative margin context lives on the parent peers tab, which sets ROST's gross, operating, and net margins against four to five named peers from the same archetype and sector.
FCF margin is reported alongside operating margin so the reader can spot cases where capex intensity changes the cash-conversion read even when reported profitability is steady.
FAQ
ROST — frequently asked questions
Based on our latest analysis, ROST looks meaningfully overvalued. The current price is $218 versus a composite fair-value midpoint of $159 (range $121–$197), which implies roughly 27.0% downside to the midpoint.
Our composite fair-value range for ROST is $121–$197, with a midpoint of $159. The range is triangulated across multiple valuation models (discounted earnings, forward earnings scenarios, peer multiples, and where applicable owner earnings or reverse DCF) and weighted by reliability for ROST's archetype.
Our current rating for ROST is Sell with a confidence score of 82/100. ROST is rated Sell at $217.71 versus the reconciled fair value midpoint of $158.93, implying -27.00% upside/downside. Confidence is separately disclosed at 82/100. This is research for educational purposes, not personalized investment advice.
The top risks our latest report flags for ROST are: Severe Margin Compression; Valuation Multiple Deflation; Unit Economics Saturation. The single biggest risk is Severe Margin Compression: Freight and supply chain costs compress operating margins structurally below historical averages, breaking the stable 12.26% margin thesis.
Our current rating for ROST is Sell, issued with a confidence score of 82/100 and a moat score of 6.5/10. The rating reflects the composite fair-value range ($121–$197) versus the current price of $218.
ROST is classified as a mature compounder stock. Archetype determines how every downstream parameter — discount rate, terminal growth, deceleration curve, terminal multiple, scenario probability weights, scorecard weights, and which valuation models are prioritized — is calibrated for ROST.
