Ross Stores (ROST) just posted another quarter of solid momentum, with higher sales, 90 new stores, and a new distribution center that together signal management is still pressing its long term expansion strategy.
See our latest analysis for Ross Stores.
The strong operations story seems to be feeding straight into sentiment, with roughly 12% 1 month share price return and a 66% 3 year total shareholder return suggesting momentum is still building rather than fading.
If Ross’s run has you rethinking your retail exposure, it could be a smart time to explore fast growing stocks with high insider ownership for other fast moving opportunities backed by committed insiders.
With the stock now hovering around analyst targets after a powerful multi year run, the real question is whether Ross’s resilient growth still leaves upside on the table or if the market is already pricing in its next leg higher.
Most Popular Narrative Narrative: 3% Overvalued
With Ross Stores last closing at $183.13 against a narrative fair value of $178.24, the current share price is running slightly ahead of that framework.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 25.5x on those 2028 earnings, up from 23.6x today. This future PE is greater than the current PE for the US Specialty Retail industry at 18.7x.
Curious why a value focused retailer is being penciled in for a premium profit multiple usually reserved for faster growers and category disruptors? Want to see which specific growth, margin, and buyback assumptions need to click perfectly to support that richer future valuation? Read on to unpack the full narrative and see how those moving parts fit together.
Result: Fair Value of $178.24 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, sustained cost pressures and Ross’s limited e commerce strategy could squeeze margins and weaken traffic, which could undermine the premium multiple embedded in this narrative.
Find out about the key risks to this Ross Stores narrative.
Build Your Own Ross Stores Narrative
If this perspective does not quite match your own, or you would rather dig into the numbers yourself, you can build a custom view in just a few minutes: Do it your way.
A great starting point for your Ross Stores research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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