ROSS STORES INC (ROST) Stock Fundamental Analysis
NASDAQ:ROST - Nasdaq - US7782961038 - Common Stock - Currency: USD
ROST gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 121 industry peers in the Specialty Retail industry. While ROST has a great profitability rating, there are some minor concerns on its financial health. ROST has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year ROST was profitable.
ROST had a positive operating cash flow in the past year.
ROST had positive earnings in each of the past 5 years.
In the past 5 years ROST always reported a positive cash flow from operatings.
1.2 Ratios
ROST has a Return On Assets of 14.03%. This is amongst the best in the industry. ROST outperforms 88.43% of its industry peers.
ROST has a better Return On Equity (37.95%) than 90.08% of its industry peers.
Looking at the Return On Invested Capital, with a value of 19.14%, ROST belongs to the top of the industry, outperforming 86.78% of the companies in the same industry.
ROST had an Average Return On Invested Capital over the past 3 years of 17.29%. This is above the industry average of 14.45%.
The last Return On Invested Capital (19.14%) for ROST is above the 3 year average (17.29%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.03% | ||
| ROE | 37.95% | ||
| ROIC | 19.14% |
ROA(3y)12.8%
ROA(5y)10.34%
ROE(3y)37.23%
ROE(5y)31.34%
ROIC(3y)17.29%
ROIC(5y)14.87%
1.3 Margins
Looking at the Profit Margin, with a value of 9.89%, ROST belongs to the top of the industry, outperforming 90.08% of the companies in the same industry.
ROST's Profit Margin has been stable in the last couple of years.
With an excellent Operating Margin value of 12.24%, ROST belongs to the best of the industry, outperforming 85.95% of the companies in the same industry.
ROST's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 27.78%, ROST is doing worse than 68.59% of the companies in the same industry.
In the last couple of years the Gross Margin of ROST has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.24% | ||
| PM (TTM) | 9.89% | ||
| GM | 27.78% |
OM growth 3Y-0.26%
OM growth 5Y-1.77%
PM growth 3Y2.8%
PM growth 5Y-0.91%
GM growth 3Y0.3%
GM growth 5Y-0.21%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ROST is creating value.
The number of shares outstanding for ROST has been reduced compared to 1 year ago.
The number of shares outstanding for ROST has been reduced compared to 5 years ago.
ROST has a better debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of ROST is 1.35, which is an excellent value as it means it would take ROST, only 1.35 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.35, ROST is doing good in the industry, outperforming 77.69% of the companies in the same industry.
A Debt/Equity ratio of 0.28 indicates that ROST is not too dependend on debt financing.
The Debt to Equity ratio of ROST (0.28) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 1.35 | ||
| Altman-Z | N/A |
ROIC/WACC2.14
WACC8.94%
2.3 Liquidity
A Current Ratio of 1.62 indicates that ROST should not have too much problems paying its short term obligations.
ROST's Current ratio of 1.62 is fine compared to the rest of the industry. ROST outperforms 66.94% of its industry peers.
A Quick Ratio of 1.09 indicates that ROST should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.09, ROST is doing good in the industry, outperforming 76.03% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.62 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.67% over the past year.
ROST shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.56% yearly.
Looking at the last year, ROST shows a small growth in Revenue. The Revenue has grown by 3.69% in the last year.
ROST shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.67% yearly.
EPS 1Y (TTM)13.67%
EPS 3Y9.15%
EPS 5Y6.56%
EPS Q2Q%-1.65%
Revenue 1Y (TTM)3.69%
Revenue growth 3Y3.76%
Revenue growth 5Y5.67%
Sales Q2Q%-1.83%
3.2 Future
Based on estimates for the next years, ROST will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.14% on average per year.
The Revenue is expected to grow by 5.53% on average over the next years.
EPS Next Y4.01%
EPS Next 2Y6.25%
EPS Next 3Y6.93%
EPS Next 5Y9.14%
Revenue Next Year3.6%
Revenue Next 2Y4.18%
Revenue Next 3Y4.52%
Revenue Next 5Y5.53%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 22.09, which indicates a rather expensive current valuation of ROST.
ROST's Price/Earnings ratio is a bit cheaper when compared to the industry. ROST is cheaper than 60.33% of the companies in the same industry.
ROST is valuated rather cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
ROST is valuated rather expensively with a Price/Forward Earnings ratio of 21.24.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ROST is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.08, ROST is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.09 | ||
| Fwd PE | 21.24 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ROST is on the same level as its industry peers.
ROST's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ROST is cheaper than 60.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.05 | ||
| EV/EBITDA | 14.31 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ROST does not grow enough to justify the current Price/Earnings ratio.
ROST has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)5.51
PEG (5Y)3.37
EPS Next 2Y6.25%
EPS Next 3Y6.93%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.16%, ROST has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 5.57, ROST pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.52, ROST's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.16% |
5.2 History
On average, the dividend of ROST grows each year by 7.57%, which is quite nice.
ROST has been paying a dividend for at least 10 years, so it has a reliable track record.
ROST has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)7.57%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
23.38% of the earnings are spent on dividend by ROST. This is a low number and sustainable payout ratio.
The dividend of ROST is growing, but earnings are growing more, so the dividend growth is sustainable.
DP23.38%
EPS Next 2Y6.25%
EPS Next 3Y6.93%
139.63
+0.95 (+0.69%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners94.25%
Inst Owner Change0.46%
Ins Owners2.06%
Ins Owner Change11.22%
Market Cap45.91B
Analysts78.57
Price Target160.62 (15.03%)
Short Float %1.69%
Short Ratio2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.16% |
Yearly Dividend1.47
Dividend Growth(5Y)7.57%
DP23.38%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.96%
Min EPS beat(2)3.93%
Max EPS beat(2)5.99%
EPS beat(4)4
Avg EPS beat(4)5.11%
Min EPS beat(4)3.93%
Max EPS beat(4)6.41%
EPS beat(8)8
Avg EPS beat(8)5.94%
EPS beat(12)11
Avg EPS beat(12)5.89%
EPS beat(16)15
Avg EPS beat(16)12.52%
Revenue beat(2)0
Avg Revenue beat(2)-3.03%
Min Revenue beat(2)-3.38%
Max Revenue beat(2)-2.68%
Revenue beat(4)0
Avg Revenue beat(4)-2.19%
Min Revenue beat(4)-3.38%
Max Revenue beat(4)-1.22%
Revenue beat(8)2
Avg Revenue beat(8)-0.97%
Revenue beat(12)3
Avg Revenue beat(12)-1.28%
Revenue beat(16)6
Avg Revenue beat(16)0.4%
PT rev (1m)-5.58%
PT rev (3m)-7.42%
EPS NQ rev (1m)0.28%
EPS NQ rev (3m)-6.27%
EPS NY rev (1m)-4.12%
EPS NY rev (3m)-4.2%
Revenue NQ rev (1m)0.2%
Revenue NQ rev (3m)-2.88%
Revenue NY rev (1m)-1.48%
Revenue NY rev (3m)-1.72%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.09 | ||
| Fwd PE | 21.24 | ||
| P/S | 2.17 | ||
| P/FCF | 28.05 | ||
| P/OCF | 19.48 | ||
| P/B | 8.33 | ||
| P/tB | 8.33 | ||
| EV/EBITDA | 14.31 |
EPS(TTM)6.32
EY4.53%
EPS(NY)6.57
Fwd EY4.71%
FCF(TTM)4.98
FCFY3.57%
OCF(TTM)7.17
OCFY5.13%
SpS64.26
BVpS16.75
TBVpS16.75
PEG (NY)5.51
PEG (5Y)3.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.03% | ||
| ROE | 37.95% | ||
| ROCE | 25.24% | ||
| ROIC | 19.14% | ||
| ROICexc | 35.57% | ||
| ROICexgc | 35.57% | ||
| OM | 12.24% | ||
| PM (TTM) | 9.89% | ||
| GM | 27.78% | ||
| FCFM | 7.75% |
ROA(3y)12.8%
ROA(5y)10.34%
ROE(3y)37.23%
ROE(5y)31.34%
ROIC(3y)17.29%
ROIC(5y)14.87%
ROICexc(3y)32.61%
ROICexc(5y)29.08%
ROICexgc(3y)32.61%
ROICexgc(5y)29.08%
ROCE(3y)22.8%
ROCE(5y)19.61%
ROICexcg growth 3Y-3.26%
ROICexcg growth 5Y2.96%
ROICexc growth 3Y-3.26%
ROICexc growth 5Y2.96%
OM growth 3Y-0.26%
OM growth 5Y-1.77%
PM growth 3Y2.8%
PM growth 5Y-0.91%
GM growth 3Y0.3%
GM growth 5Y-0.21%
F-Score7
Asset Turnover1.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 1.35 | ||
| Debt/EBITDA | 0.5 | ||
| Cap/Depr | 161.17% | ||
| Cap/Sales | 3.41% | ||
| Interest Coverage | 32.19 | ||
| Cash Conversion | 77.73% | ||
| Profit Quality | 78.29% | ||
| Current Ratio | 1.62 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z | N/A |
F-Score7
WACC8.94%
ROIC/WACC2.14
Cap/Depr(3y)169.59%
Cap/Depr(5y)154.94%
Cap/Sales(3y)3.55%
Cap/Sales(5y)3.37%
Profit Quality(3y)80.07%
Profit Quality(5y)494.81%
High Growth Momentum
Growth
EPS 1Y (TTM)13.67%
EPS 3Y9.15%
EPS 5Y6.56%
EPS Q2Q%-1.65%
EPS Next Y4.01%
EPS Next 2Y6.25%
EPS Next 3Y6.93%
EPS Next 5Y9.14%
Revenue 1Y (TTM)3.69%
Revenue growth 3Y3.76%
Revenue growth 5Y5.67%
Sales Q2Q%-1.83%
Revenue Next Year3.6%
Revenue Next 2Y4.18%
Revenue Next 3Y4.52%
Revenue Next 5Y5.53%
EBIT growth 1Y12.04%
EBIT growth 3Y3.49%
EBIT growth 5Y3.8%
EBIT Next Year23.92%
EBIT Next 3Y12%
EBIT Next 5Y11.01%
FCF growth 1Y-6.55%
FCF growth 3Y11.5%
FCF growth 5Y0.26%
OCF growth 1Y-6.26%
OCF growth 3Y10.67%
OCF growth 5Y1.65%