Ross Stores, Inc. (ROST) stock analysis

P/E above its 5-year median

Ross Stores's P/E of 29.2 is above its own 5-year median of 24.5.

P/E above the industry

Ross Stores's P/E of 29.2 is above the Family Clothing Stores median of 12.0.

EV/EBITDA against its history

Needs positive EBITDA and price history.

P/B above the industry

Ross Stores's price-to-book of 11.43 is above the Family Clothing Stores median of 2.58.

Trading above fair value

The share price of $241.27 is above our fair value estimate of $118.48.

Margin of safety under 20%

The price is 104% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 6.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 14.7% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 28.9% over the last twelve months, against a 5-year average of 90.6% a year.

Growing faster than the industry

Revenue grew 14.0% over the last twelve months; the Family Clothing Stores median is 5.5%.

Guidance raised

Ross Stores raised its 2026 fiscal year earnings per share outlook on Aug 20, 2026.

Gross margin improving

Gross margin was 29.7% over the last twelve months, against 27.6% a year earlier.

Return on equity over 15%

Return on equity was 42.6% over the last twelve months and averaged 40.2% over five years.

Return on capital over 10%

Return on invested capital was 74.4%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Ross Stores's return on equity of 42.6% is above the Family Clothing Stores median of 40.5%.

Earnings grew over 5 years

Net income grew 90.6% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 10.8% over the last twelve months, against a 5-year average of 9.1%.

Net margin above the industry

Ross Stores's net margin of 10.8% is above the Family Clothing Stores median of 9.3%.

Low debt

Debt is 15.1% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 76.4% five years ago to 15.1%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 359% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.61 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 7.93; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Ross Stores paid dividends worth 0.7% of the share price over the last twelve months.

Yield below Treasuries

The 0.7% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Ross Stores yields 0.7%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Covered by earnings

Dividends take 20.6% of net income.

Covered by free cash flow

Dividends take 19.7% of free cash flow.