Ross Stores, Inc. Fundamental Analysis (NASDAQ: ROST)
Ross Stores, Inc. (NASDAQ: ROST) shows moderate financial fundamentals with a PE ratio of 28.73, profit margin of 10.85%, and ROE of 41.85%. The company generates $24.7B in annual revenue with moderate year-over-year growth of 7.67%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 70.3/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze ROST's fundamental strength across five key dimensions:
Efficiency Score
ExcellentROST demonstrates superior asset utilization.
Valuation Score
ModerateROST shows balanced valuation metrics.
Growth Score
ModerateROST shows steady but slowing expansion.
Financial Health Score
ExcellentROST maintains a strong and stable balance sheet.
Profitability Score
ModerateROST maintains healthy but balanced margins.
Key Financial Metrics
Is ROST Expensive or Cheap?
P/E Ratio
ROST trades at 28.73 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, ROST's PEG of 0.91 indicates potential undervaluation.
Price to Book
The market values Ross Stores, Inc. at 10.82 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 19.40 times EBITDA. This signals the market has high growth expectations.
How Well Does ROST Make Money?
Net Profit Margin
For every $100 in sales, Ross Stores, Inc. keeps $10.85 as profit after all expenses.
Operating Margin
Core operations generate 13.75 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $41.85 in profit for every $100 of shareholder equity.
ROA
Ross Stores, Inc. generates $16.64 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Ross Stores, Inc. produces operating cash flow of $3.69B, showing steady but balanced cash generation.
Free Cash Flow
Ross Stores, Inc. generates strong free cash flow of $2.81B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $8.77 in free cash annually.
FCF Yield
ROST converts 3.62% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
28.73
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.91
vs 25 benchmark
P/B Ratio
Price to book value ratio
10.82
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.13
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.67
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.61
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.42
vs 25 benchmark
ROA
Return on assets percentage
0.17
vs 25 benchmark
ROCE
Return on capital employed
0.30
vs 25 benchmark
How ROST Stacks Against Its Sector Peers
| Metric | ROST Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 28.73 | 26.29 | Neutral |
| ROE | 41.85% | 966.00% | Weak |
| Net Margin | 10.85% | -4927.00% (disorted) | Strong |
| Debt/Equity | 0.67 | 0.60 | Neutral |
| Current Ratio | 1.61 | 2.32 | Neutral |
| ROA | 16.64% | 295.00% | Weak |
ROST outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Ross Stores, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
100.09%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
2668.89%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
48.54%
Industry Style: Cyclical, Growth, Discretionary
High Growth