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Relative to Consumer Discretionary Sector Median (N=442)
Metric
ROST
Benchmark
P/E Ratio
34.8x
+42%
EV/EBITDA
27.4x
+460%
Price / Book
11.3x
Implied Value Audit
OVERVALUED
Implied Fair Value (vs Sector)
-84.7%
$34.50Spot: $224.91
Spot
Implied
-50% Delta+50% Delta
Relative valuation derived from Consumer Discretionary sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
32.4%
Sector: 6.2%
Dividend Analysis audit
GROWTH
1.00%
Trailing Yield
$1.00
Per $100 Invested
Modest dividend — capital prioritized for reinvestment.
Est. Payout Ratio
35%SAFE
Analyst Projections
Analyst Consensus
Unlock Valuation Tools
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Based on our 6-factor quantitative model, ROSS STORES, INC. (ROST) receives a "Hold" rating with a composite score of 54.0/100, ranked #364 out of 4446 stocks. Key factor scores: Quality 50/100, Value 55/100, Momentum 68/100. This is quantitative analysis only — not investment advice.
ROSS STORES, INC. (ROST) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does ROSS STORES, INC. Do?
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 brand names. Its stores primarily offer apparel, accessories, footwear, and home fashions. The company's Ross Dress for Less stores sell its products at department and specialty stores primarily to middle income households; and dd's DISCOUNTS stores sell its products at department and discount stores for households with moderate income. As of March 7, 2022, it operated approximately 1,649 stores under the Ross Dress for Less name' and 303 dd's DISCOUNTS stores in 40 states, the District of Columbia, and Guam. Ross Stores, Inc. was incorporated in 1957 and is headquartered in Dublin, California. ROSS STORES, INC. (ROST) is classified as a large-cap stock in the Consumer Discretionary sector, specifically within the Retail industry. The company is led by CEO Barbara Rentler and employs approximately 100,000 people, headquartered in Dublin, California. With a market capitalization of $71.1B, ROST is one of the prominent companies in the Consumer Discretionary sector.
ROSS STORES, INC. (ROST) Stock Rating — Hold (April 2026)
As of April 2026, ROSS STORES, INC. receives a Hold rating with a composite score of 54.0/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.ROST ranks #364 out of 4,446 stocks in our coverage universe. Within the Consumer Discretionary sector, ROSS STORES, INC. ranks #19 of 442 stocks, placing it in the top 10% of its Consumer Discretionary peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
ROST Stock Price and 52-Week Range
ROSS STORES, INC. (ROST) currently trades at $224.91. The 52-week high for ROST is $216.80, which means the stock is currently trading 3.7% from its annual peak. The 52-week low is $122.36, putting the stock 83.8% above its annual trough. Recent trading volume was 0 shares, suggesting relatively thin trading activity.
Is ROST Overvalued or Undervalued? — Valuation Analysis
ROSS STORES, INC. (ROST) carries a value factor score of 55/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 34.79x, compared to the Consumer Discretionary sector average of 24.47x — a premium of 42%. The price-to-book ratio stands at 11.26x, versus the sector average of 1.99x. The price-to-sales ratio is 3.34x, compared to 0.27x for the average Consumer Discretionary stock. On an enterprise value basis, ROST trades at 27.45x EV/EBITDA, versus 4.91x for the sector.
Overall, ROST's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
ROSS STORES, INC. Profitability — ROE, Margins, and Quality Score
ROSS STORES, INC. (ROST) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 32.4%, compared to the Consumer Discretionary sector average of 6.2%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 12.9% versus the sector average of 2.5%.
On a margin basis, ROSS STORES, INC. reports gross margins of 28.1%, compared to 36.9% for the sector. The operating margin is 12.4% (sector: 3.8%). Net profit margin stands at 9.6%, versus 2.1% for the average Consumer Discretionary stock. Revenue growth is running at 13.8% on a trailing basis, compared to 3.3% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
ROST Debt, Balance Sheet, and Financial Health
ROSS STORES, INC. has a debt-to-equity ratio of 25.0%, compared to the Consumer Discretionary sector average of 89.0%. The low leverage indicates a conservative balance sheet with significant financial flexibility. The current ratio is 1.58x, suggesting adequate working capital coverage. Total debt on the balance sheet is $1.52B. Cash and equivalents stand at $4.06B.
ROST has a beta of 0.74, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for ROSS STORES, INC. is 77/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
ROSS STORES, INC. Revenue and Earnings History — Quarterly Trend
In TTM 2026, ROSS STORES, INC. reported revenue of $20.87B and earnings per share (EPS) of $6.66. Net income for the quarter was $2.00B. Gross margin was 28.1%. Operating income came in at $2.59B.
In FY 2026, ROSS STORES, INC. reported revenue of $22.75B and earnings per share (EPS) of $6.66. Net income for the quarter was $2.15B. Gross margin was 27.7%. Revenue grew 7.7% year-over-year compared to FY 2025. Operating income came in at $2.71B.
In Q2 2026, ROSS STORES, INC. reported revenue of $5.53B and earnings per share (EPS) of $1.57. Net income for the quarter was $508M. Gross margin was 27.6%. Revenue grew 4.6% year-over-year compared to Q2 2025. Operating income came in at $638M.
In Q1 2026, ROSS STORES, INC. reported revenue of $4.98B and earnings per share (EPS) of $1.48. Net income for the quarter was $479M. Gross margin was 28.2%. Revenue grew 2.6% year-over-year compared to Q1 2025. Operating income came in at $606M.
Over the past 8 quarters, ROSS STORES, INC. has demonstrated a growth trajectory, with revenue expanding from $4.86B to $20.87B. Investors analyzing ROST stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
ROST Dividend Yield and Income Analysis
ROSS STORES, INC. (ROST) currently pays a dividend yield of 1.0%. At this yield, a $10,000 investment in ROST stock would generate approximately $$100.00 in annual dividend income. The net margin of 9.6% provides reasonable coverage for the dividend, though investors should monitor payout sustainability.
ROST Momentum and Technical Analysis Profile
ROSS STORES, INC. (ROST) has a momentum factor score of 68/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 28/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 33/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
ROST vs Competitors — Consumer Discretionary Sector Ranking and Peer Comparison
Comparing ROST against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full ROST vs S&P 500 (SPY) comparison to assess how ROSS STORES, INC. stacks up against the broader market across all factor dimensions.
ROST Next Earnings Date
No upcoming earnings date has been announced for ROSS STORES, INC. (ROST) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy ROST? — Investment Thesis Summary
ROSS STORES, INC. presents a balanced picture with arguments on both sides. Price momentum is positive at 68/100, suggesting the trend favors buyers. Low volatility (stability score 77/100) reduces downside risk.
In summary, ROSS STORES, INC. (ROST) earns a Hold rating with a composite score of 54.0/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on ROST stock.
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Institutional Research Dossier
ROSS STORES, INC. (ROST) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain a Hold rating on Ross Stores (ROST), driven by a balanced view of its strong operational performance and premium valuation. The company's consistent execution in the off-price retail sector, demonstrated by robust revenue growth and healthy margins, is offset by a P/E ratio significantly above the sector average, suggesting limited near-term upside. While Ross Stores exhibits strong financial health and a proven business model, the current valuation necessitates caution, warranting a Hold recommendation.
The primary takeaway is that while Ross Stores is a well-managed company with a solid track record, its current market price reflects much of its future growth potential. Investors should consider the high valuation multiples relative to the consumer discretionary sector and weigh the potential for multiple compression against the company's ability to sustain its impressive performance. Any significant pullback in price could present a more attractive entry point.
Business Strategy & Overview
Ross Stores operates in the off-price retail sector, offering apparel, accessories, footwear, and home fashions at discounted prices. The company's core strategy revolves around sourcing merchandise from a wide range of vendors, including department stores, specialty stores, and manufacturers, capitalizing on overstocks, closeouts, and production cancellations. This allows Ross to offer brand-name and designer merchandise at prices significantly below traditional retail.
The company operates two distinct store formats: Ross Dress for Less, targeting middle-income households, and dd's DISCOUNTS, catering to households with more moderate incomes. This dual-brand strategy allows Ross Stores to capture a broader customer base and penetrate different market segments. The company focuses on maintaining a lean operating model, controlling costs, and efficiently managing inventory to maximize profitability.
Ross Stores' strategic positioning within the retail landscape is predicated on providing value to consumers seeking recognizable brands at affordable prices. Unlike traditional retailers that rely on seasonal collections and full-price sales, Ross operates on a treasure hunt model, where merchandise assortment changes frequently, creating a sense of urgency and encouraging repeat visits. This approach differentiates Ross from both department stores and discount retailers.
The company's growth strategy involves expanding its store footprint across the United States, focusing on markets with favorable demographics and limited competition. Ross Stores also invests in its supply chain and distribution network to ensure efficient inventory management and timely delivery of merchandise to its stores. The company's management team has a proven track record of executing its strategy and delivering consistent financial results.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
13.8%
Sector: 3.3%
+319% VS SCTR
Economic Moat Analysis
Ross Stores possesses a Narrow economic moat, primarily derived from its cost advantages and efficient scale. The company's ability to source merchandise at significantly discounted prices allows it to offer compelling value to consumers, creating a competitive edge over traditional retailers. This cost advantage stems from Ross's extensive network of vendors and its expertise in negotiating favorable purchasing terms.
Efficient scale also contributes to Ross Stores' moat. The company's large store base and high sales volume enable it to achieve economies of scale in purchasing, distribution, and marketing. This allows Ross to spread its fixed costs over a larger revenue base, resulting in lower operating expenses per unit. The company's established infrastructure and operational expertise create a barrier to entry for smaller competitors.
However, the moat is not considered Wide due to the relatively low switching costs for consumers and the potential for competition from other off-price retailers and online marketplaces. While Ross Stores has built a strong brand reputation, consumers can easily switch to alternative retailers offering similar value propositions. The off-price retail sector is also becoming increasingly competitive, with new entrants and established players expanding their presence.
Furthermore, the company's reliance on opportunistic sourcing of merchandise introduces some uncertainty. Changes in the retail landscape, such as shifts in consumer preferences or disruptions in the supply chain, could impact Ross Stores' ability to secure desirable merchandise at attractive prices. While the company has demonstrated its ability to adapt to changing market conditions, this remains a potential vulnerability.
Financial Health & Profitability
Ross Stores exhibits strong financial health, characterized by consistent revenue growth, healthy margins, and a solid balance sheet. The company's revenue has grown steadily over the past several years, driven by store expansion and same-store sales growth. The recent quarterly data shows continued revenue growth, with Q2 FY2026 revenue reaching $5.53 billion, up from $4.98 billion in Q1 FY2026. This demonstrates the company's ability to attract and retain customers.
The company's gross margin has remained relatively stable, hovering around 27-28% in recent quarters. Operating margin has also been consistently strong, exceeding 12% in recent periods. These healthy margins reflect Ross Stores' efficient operating model and its ability to control costs. The company's net income has also grown steadily, reaching $508.00 million in Q2 FY2026, compared to $479.25 million in Q1 FY2026.
Ross Stores maintains a strong balance sheet, with $4.06 billion in total cash and $1.52 billion in total debt. The company's current ratio of 1.58 indicates a healthy level of liquidity. The debt-to-equity ratio of 26.00 is significantly lower than the sector average of 91.00, indicating a conservative approach to leverage. This financial flexibility allows Ross Stores to invest in its growth initiatives and return capital to shareholders.
The company's return on equity (ROE) of 34.9% is significantly higher than the sector average of 5.8%, indicating efficient use of shareholder capital. While free cash flow data is unavailable, the company's consistent profitability and strong cash position suggest that it generates substantial free cash flow. Overall, Ross Stores' financial health is robust, providing a solid foundation for future growth.
Valuation Assessment
Ross Stores' valuation is a key concern, as indicated by the BCR proprietary quant model's Value score of 42/100. The company's P/E ratio of 134.5x is significantly higher than the consumer discretionary sector average of 28.0x. This suggests that the stock is trading at a premium to its peers, reflecting investor expectations for future growth. However, the high P/E ratio also implies a greater risk of multiple compression if the company fails to meet these expectations.
Similarly, the company's EV/EBITDA ratio of 27.4x is substantially higher than the sector average of 5.3x. This further reinforces the view that Ross Stores is richly valued relative to its earnings. While the company's strong financial performance and growth prospects may justify a premium valuation, the magnitude of the premium warrants caution.
Given the lack of free cash flow data, it is difficult to assess the company's valuation based on FCF yield. However, the high P/E and EV/EBITDA ratios suggest that the stock is not undervalued. Investors should carefully consider the potential for multiple compression and the company's ability to sustain its impressive growth rate when evaluating the stock's valuation.
While Ross Stores' strong financial performance and growth prospects may justify a premium valuation, the magnitude of the premium warrants caution. A Hold rating is appropriate, reflecting the balanced view of the company's strong fundamentals and its rich valuation. Any significant pullback in price could present a more attractive entry point.
Risk & Uncertainty
Several risks could impact Ross Stores' future performance. One significant risk is the potential for increased competition in the off-price retail sector. As more retailers enter the market and existing players expand their presence, Ross Stores may face increased pressure on pricing and margins. The rise of online marketplaces also poses a threat, as consumers have access to a wider range of discounted merchandise.
Another risk is the company's reliance on opportunistic sourcing of merchandise. Changes in the retail landscape, such as shifts in consumer preferences or disruptions in the supply chain, could impact Ross Stores' ability to secure desirable merchandise at attractive prices. The company's ability to adapt to changing market conditions and maintain its sourcing relationships is crucial to its success.
Economic downturns could also negatively impact Ross Stores' performance. During periods of economic weakness, consumers may reduce their discretionary spending, leading to lower sales and profits. While Ross Stores' value proposition may make it more resilient than other retailers, it is still vulnerable to macroeconomic factors.
Finally, execution risk is always a concern for retailers. Ross Stores' ability to effectively manage its store expansion, control costs, and maintain its brand reputation is essential to its long-term success. Any missteps in these areas could negatively impact the company's financial performance and stock price.
Bulls Say / Bears Say
The Bull Case
BULL VIEWRoss Stores' consistent execution and strong financial performance justify its premium valuation, as the company has a proven track record of delivering growth and profitability.
BULL VIEWThe company's efficient operating model and opportunistic sourcing strategy provide a sustainable competitive advantage, allowing it to offer compelling value to consumers and maintain healthy margins.
BULL VIEWRoss Stores' store expansion strategy and dual-brand approach position it for continued growth in the off-price retail sector, as it captures a broader customer base and penetrates different market segments.
The Bear Case
BEAR VIEWRoss Stores' high P/E and EV/EBITDA ratios suggest that the stock is overvalued, and there is a significant risk of multiple compression if the company fails to meet investor expectations.
BEAR VIEWIncreased competition in the off-price retail sector and the rise of online marketplaces could put pressure on Ross Stores' pricing and margins, eroding its competitive advantage.
BEAR VIEWEconomic downturns could negatively impact Ross Stores' sales and profits, as consumers reduce their discretionary spending and shift their purchasing patterns.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score ROST and 4,400+ other equities.
ROSS STORES, INC. exhibits a 527% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
12.9%
Sector: 2.5%
Gross Margin
Pricing power and cost efficiency
28.1%
Sector: 36.9%
Operating Margin
Core business profitability
12.4%
Sector: 3.8%
Net Margin
Bottom-line profitability
9.6%
Sector: 2.1%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.00%
Yield Delta—
Income Projection audit
A $10,000 investment would generate approximately $100 annually in dividends at the current trailing rate.
