One-glance verdict
Overvalued
$175.30 our estimate vs market $252.85
Wall Street consensus: $256.00 (46.0% higher than our fair-value estimate)
44% above our estimate, beyond the bull case
Fundamentals snapshot
Ross Stores, Inc.
ROST · NMS · Consumer Cyclical · Apparel Retail
Current price
$252.85
52-week range
$137.58 - $257.00
Market cap
$81.11B
Balance sheet
Healthy
71.36x Strong cushion
Net debt $592.17M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 4.5% last year.
- Reward Returns 39.0% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 35.1% above its 5-year average P/E.
What this company does
Ross Stores, Inc.
Ross Stores runs discount shops like Ross Dress for Less, selling brand-name clothing and home goods for less than other retailers. The company makes money by purchasing unsold inventory from the supply chains (the entire process of making and selling goods, from factory to store) of other brands and selling it to budget-conscious families. This "off-price" model can be successful even when the economy is slow, as more people are looking for bargains.
How the company got here
Ross Stores started in 1950 as a small family-owned department store in California. The big turning point came in 1982 when a new group of investors bought the then-six stores and transformed them into an 'off-price' retailer. This new business model involved buying excess or out-of-season brand-name goods from manufacturers at a steep discount and selling them to customers for less than department stores. This strategy proved very successful, leading to rapid expansion, and the company became publicly traded in 1985. In 2004, Ross launched a second store concept, dd's DISCOUNTS, to appeal to shoppers with more moderate incomes.
What it actually does
Ross Stores is an off-price retailer, which means it sells brand-name clothing, shoes, accessories, and home goods at prices significantly lower than what you'd find in a typical department store. They do this by purchasing 'opportunistically'—buying up leftover inventory, canceled orders, or past-season items from manufacturers and other retailers. This creates a constantly changing selection of items and a 'treasure hunt' shopping experience, where you never know what you might find. The company operates entirely out of physical stores and does not have a significant e-commerce (online shopping) business.
Ross Dress for Less
This is the company's main and largest business, making up the vast majority of its stores and sales. These stores offer brand-name and designer apparel, footwear, and home fashions for the whole family at prices that are 20% to 60% below what department and specialty stores charge. The target customers are generally from middle-income households who are looking for well-known brands at a bargain. The ever-changing assortment of items encourages shoppers to visit often to see what new deals have arrived.
dd's DISCOUNTS
Launched in 2004, this is a smaller but growing part of the company. dd's DISCOUNTS stores are designed to serve customers from households with lower-to-moderate incomes. While it also sells clothing, shoes, and home items, the brands are typically more moderately priced than those at Ross Dress for Less, and the discounts can be even deeper, often 20% to 70% off regular prices. These stores are usually located in neighborhood shopping centers in urban and suburban areas.
What management is betting on now
The company's main strategy is to continue opening new physical stores across the United States for both its Ross Dress for Less and dd's DISCOUNTS brands. Management has publicly stated long-term goals of operating roughly 2,900 Ross stores and 700 dd's DISCOUNTS locations, indicating a long runway for growth. They are also focused on efficient supply chain management (the process of getting products from the supplier to the store shelves) to keep costs low. By sticking to their off-price model and avoiding online sales, they are betting that customers will continue to be drawn to the in-store 'treasure hunt' for bargains.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q3
$394.63M
FY2025 Q4
$333.00M
FY2026 Q1
$676.58M
FY2026 Q2
$202.34M
FY2026 Q3
$466.63M
FY2026 Q4
$617.83M
FY2027 Q2
$627.05M
Revenue
$6.01B
Net income
$649.96M
Diluted EPS
2.02
Operating cash flow
$836.01M
Free cash flow
$627.05M
Fetching…
Sources
Revenue
$5.60B
Net income
$511.94M
Diluted EPS
1.58
Operating cash flow
$827.09M
Free cash flow
$617.83M
Fetching…
Sources
Revenue
$5.53B
Net income
$508.00M
Diluted EPS
1.56
Operating cash flow
$668.36M
Free cash flow
$466.63M
Fetching…
Sources
Revenue
$4.98B
Net income
$479.25M
Diluted EPS
1.47
Operating cash flow
$409.71M
Free cash flow
$202.34M
Fetching…
Sources
Revenue
$5.91B
Net income
$586.78M
Diluted EPS
1.79
Operating cash flow
$882.56M
Free cash flow
$676.58M
Fetching…
Sources
Revenue
$5.07B
Net income
$488.81M
Diluted EPS
1.48
Operating cash flow
$513.39M
Free cash flow
$333.00M
Fetching…
Sources
Revenue
$5.29B
Net income
$527.15M
Diluted EPS
1.59
Operating cash flow
$592.12M
Free cash flow
$394.63M
Fetching…
Sources
Is it cheap or expensive?
Fair value $175.30 vs current price $252.85
Wall Street consensus is the average analyst price target: $256.00 (46.0% higher than our fair-value estimate).
Our most-likely fair value is $175.30 a share — about 30.7% below today's price of $252.85, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net debt $592.2M. Interest coverage 71.4x.
Net debt
$592.17M
Interest coverage
71.36x
Ross Stores, Inc.'s profit covers its interest bill about 71.4 times over. which is stronger than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
ROST
BASELINE
Ross Stores, Inc.
Total debt $4.72B Interest coverage 71.36x This is the baseline the peer rows are being compared against.
Total debt $14.18B Interest coverage 97.00x +36% vs ROST Carries about 1.4x more debt cushion than ROST.
Total debt $5.87B Interest coverage 11.89x -83% vs ROST Carries about 6.0x less debt cushion than ROST.
Total debt $15.80B Interest coverage 9.56x -87% vs ROST Carries about 7.5x less debt cushion than ROST.
Total debt $7.59B Interest coverage 19.33x -73% vs ROST Carries about 3.7x less debt cushion than ROST.
Total debt $2.00B Interest coverage 34.71x -51% vs ROST Carries about 2.1x less debt cushion than ROST.
What you should know
The case for and against ROST
3 Rewards
1 Risk
Rewards
-
Revenue grew 4.5% last year.
-
Returns 39.0% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 35.1% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
35.31x
Forward P/E
29.53x
P/B
12.87x
P/S
3.41x
EV/EBITDA
23.65x
PEG ratio
2.97x
Profitability
How much profit each dollar creates
Gross margin
32.7%
Operating margin
13.4%
Net margin
9.7%
ROE
39.0%
ROA
12.2%
Health
Liquidity and balance-sheet strength
Debt / equity
0.75x
Current ratio
1.54x
Quick ratio
0.88x
Total debt
$4.72B
Total cash
$4.13B
Growth
How the business has been compounding
Revenue TTM
$23.78B
Revenue 5Y CAGR
4.7%
EPS TTM
7.16
EPS 5Y CAGR
14.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$3.45B
Free CF TTM
$2.21B
FCF margin
9.3%
Dividend
Shareholder payout
Yield
0.7%
Payout ratio
23.2%
Last ex-div date
2026-06-09