185.95 USD
-1.62 (-0.86%)
ROST gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 122 industry peers in the Specialty Retail industry. ROST gets an excellent profitability rating and is at the same time showing great financial health properties. ROST has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- ROST had positive earnings in the past year.
- In the past year ROST had a positive cash flow from operations.
- Each year in the past 5 years ROST has been profitable.
- ROST had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of ROST (13.53%) is better than 89.34% of its industry peers.
- The Return On Equity of ROST (35.45%) is better than 87.70% of its industry peers.
- ROST has a Return On Invested Capital of 19.14%. This is amongst the best in the industry. ROST outperforms 86.89% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for ROST is significantly above the industry average of 12.24%.
- 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 | 13.53% | ||
| ROE | 35.45% | ||
| 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
- ROST's Profit Margin of 9.47% is amongst the best of the industry. ROST outperforms 87.70% of its industry peers.
- ROST's Profit Margin has been stable in the last couple of years.
- Looking at the Operating Margin, with a value of 11.91%, ROST belongs to the top of the industry, outperforming 86.07% of the companies in the same industry.
- ROST's Operating Margin has declined in the last couple of years.
- ROST has a Gross Margin of 27.55%. This is in the lower half of the industry: ROST underperforms 72.95% of its industry peers.
- ROST's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.91% | ||
| PM (TTM) | 9.47% | ||
| GM | 27.55% |
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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so 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.
- The debt/assets ratio for ROST has been reduced compared to a year ago.
2.2 Solvency
- ROST has an Altman-Z score of 6.44. This indicates that ROST is financially healthy and has little risk of bankruptcy at the moment.
- ROST has a Altman-Z score of 6.44. This is amongst the best in the industry. ROST outperforms 93.44% of its industry peers.
- The Debt to FCF ratio of ROST is 0.77, which is an excellent value as it means it would take ROST, only 0.77 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of ROST (0.77) is better than 80.33% of its industry peers.
- A Debt/Equity ratio of 0.17 indicates that ROST is not too dependend on debt financing.
- ROST's Debt to Equity ratio of 0.17 is fine compared to the rest of the industry. ROST outperforms 63.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.17 | ||
| Debt/FCF | 0.77 | ||
| Altman-Z | 6.44 |
ROIC/WACC2
WACC9.59%
2.3 Liquidity
- ROST has a Current Ratio of 1.52. This is a normal value and indicates that ROST is financially healthy and should not expect problems in meeting its short term obligations.
- ROST has a better Current ratio (1.52) than 60.66% of its industry peers.
- A Quick Ratio of 0.90 indicates that ROST may have some problems paying its short term obligations.
- ROST has a Quick ratio of 0.90. This is in the better half of the industry: ROST outperforms 68.85% of its industry peers.
- ROST does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.52 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 0.79% 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.
- ROST shows a small growth in Revenue. In the last year, the Revenue has grown by 3.71%.
- ROST shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.67% yearly.
EPS 1Y (TTM)0.79%
EPS 3Y9.15%
EPS 5Y6.56%
EPS Q2Q%6.76%
Revenue 1Y (TTM)3.71%
Revenue growth 3Y3.76%
Revenue growth 5Y5.67%
Sales Q2Q%10.44%
3.2 Future
- The Earnings Per Share is expected to grow by 9.11% on average over the next years. This is quite good.
- The Revenue is expected to grow by 4.98% on average over the next years.
EPS Next Y4.44%
EPS Next 2Y7.4%
EPS Next 3Y7.62%
EPS Next 5Y9.11%
Revenue Next Year6.98%
Revenue Next 2Y5.69%
Revenue Next 3Y5.4%
Revenue Next 5Y4.98%
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.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 29.05, the valuation of ROST can be described as expensive.
- Based on the Price/Earnings ratio, ROST is valued a bit cheaper than 63.93% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.25. ROST is around the same levels.
- With a Price/Forward Earnings ratio of 25.51, ROST can be considered very expensive at the moment.
- The rest of the industry has a similar Price/Forward Earnings ratio as ROST.
- ROST is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.05 | ||
| Fwd PE | 25.51 |
4.2 Price Multiples
- ROST's Enterprise Value to EBITDA is on the same level as the industry average.
- Based on the Price/Free Cash Flow ratio, ROST is valued a bit cheaper than the industry average as 61.48% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.8 | ||
| EV/EBITDA | 18.76 |
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.
- The excellent profitability rating of ROST may justify a higher PE ratio.
PEG (NY)6.54
PEG (5Y)4.43
EPS Next 2Y7.4%
EPS Next 3Y7.62%
5. Dividend
5.1 Amount
- ROST has a yearly dividend return of 0.87%, which is pretty low.
- Compared to an average industry Dividend Yield of 2.15, ROST pays a bit more dividend than its industry peers.
- With a Dividend Yield of 0.87, ROST pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.87% |
5.2 History
- On average, the dividend of ROST grows each year by 7.61%, which is quite nice.
- ROST has paid a dividend for at least 10 years, which is a reliable track record.
- ROST has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)7.61%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
- 24.85% of the earnings are spent on dividend by ROST. This is a low number and sustainable payout ratio.
- The dividend of ROST is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP24.85%
EPS Next 2Y7.4%
EPS Next 3Y7.62%
ROSS STORES INC / ROST FAQ
What is the ChartMill fundamental rating of ROSS STORES INC (ROST) stock?
ChartMill assigns a fundamental rating of 7 / 10 to ROST.
What is the valuation status of ROSS STORES INC (ROST) stock?
ChartMill assigns a valuation rating of 4 / 10 to ROSS STORES INC (ROST). This can be considered as Fairly Valued.
How profitable is ROSS STORES INC (ROST) stock?
ROSS STORES INC (ROST) has a profitability rating of 8 / 10.
What is the valuation of ROSS STORES INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for ROSS STORES INC (ROST) is 29.05 and the Price/Book (PB) ratio is 10.28.
Is the dividend of ROSS STORES INC sustainable?
The dividend rating of ROSS STORES INC (ROST) is 5 / 10 and the dividend payout ratio is 24.85%.