ROSS STORES INC (ROST) Stock Fundamental Analysis
NASDAQ:ROST - Nasdaq - US7782961038 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to ROST. ROST was compared to 122 industry peers in the Specialty Retail industry. ROST has an excellent profitability rating, but 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.
In the past 5 years ROST has always been profitable.
ROST had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ROST has a Return On Assets of 14.55%. This is amongst the best in the industry. ROST outperforms 88.52% of its industry peers.
ROST has a Return On Equity of 37.34%. This is amongst the best in the industry. ROST outperforms 88.52% of its industry peers.
With an excellent Return On Invested Capital value of 19.99%, ROST belongs to the best of the industry, outperforming 88.52% 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 12.95%.
The last Return On Invested Capital (19.99%) for ROST is above the 3 year average (17.29%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.55% | ||
| ROE | 37.34% | ||
| ROIC | 19.99% |
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 has a Profit Margin of 9.79%. This is amongst the best in the industry. ROST outperforms 89.34% of its industry peers.
ROST's Profit Margin has been stable in the last couple of years.
ROST has a better Operating Margin (12.24%) than 87.70% of its industry peers.
ROST's Operating Margin has declined in the last couple of years.
ROST has a Gross Margin of 27.78%. This is in the lower half of the industry: ROST underperforms 69.67% of its industry peers.
ROST's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.24% | ||
| PM (TTM) | 9.79% | ||
| 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
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.
Compared to 5 years ago, ROST has less shares outstanding
The debt/assets ratio for ROST has been reduced compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of ROST is 0.94, which is an excellent value as it means it would take ROST, only 0.94 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ROST (0.94) is better than 81.15% of its industry peers.
ROST has a Debt/Equity ratio of 0.18. This is a healthy value indicating a solid balance between debt and equity.
ROST's Debt to Equity ratio of 0.18 is fine compared to the rest of the industry. ROST outperforms 64.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.18 | ||
| Debt/FCF | 0.94 | ||
| Altman-Z | N/A |
ROIC/WACC2.13
WACC9.4%
2.3 Liquidity
ROST has a Current Ratio of 1.55. This is a normal value and indicates that ROST is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of ROST (1.55) is better than 63.93% of its industry peers.
A Quick Ratio of 0.95 indicates that ROST may have some problems paying its short term obligations.
With a decent Quick ratio value of 0.95, ROST is doing good in the industry, outperforming 75.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.55 | ||
| Quick Ratio | 0.95 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.75% 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 2.49%.
Measured over the past years, ROST shows a small growth in Revenue. The Revenue has been growing by 5.67% on average per year.
EPS 1Y (TTM)6.75%
EPS 3Y9.15%
EPS 5Y6.56%
EPS Q2Q%0.68%
Revenue 1Y (TTM)2.49%
Revenue growth 3Y3.76%
Revenue growth 5Y5.67%
Sales Q2Q%2.61%
3.2 Future
ROST is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.51% yearly.
Based on estimates for the next years, ROST will show a small growth in Revenue. The Revenue will grow by 4.84% on average per year.
EPS Next Y0.15%
EPS Next 2Y4.83%
EPS Next 3Y6.45%
EPS Next 5Y8.51%
Revenue Next Year3.97%
Revenue Next 2Y4.24%
Revenue Next 3Y4.5%
Revenue Next 5Y4.84%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
A Price/Earnings ratio of 20.15 indicates a rather expensive valuation of ROST.
Based on the Price/Earnings ratio, ROST is valued a bit cheaper than the industry average as 68.85% of the companies are valued more expensively.
ROST is valuated rather cheaply when we compare the Price/Earnings ratio to 27.51, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 18.37, which indicates a rather expensive current valuation of ROST.
ROST's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of ROST to the average of the S&P500 Index (35.58), we can say ROST is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.15 | ||
| Fwd PE | 18.37 |
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 66.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.97 | ||
| EV/EBITDA | 13.3 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of ROST may justify a higher PE ratio.
PEG (NY)132.97
PEG (5Y)3.07
EPS Next 2Y4.83%
EPS Next 3Y6.45%
5. Dividend
5.1 Amount
ROST has a Yearly Dividend Yield of 1.24%. Purely for dividend investing, there may be better candidates out there.
ROST's Dividend Yield is a higher than the industry average which is at 4.90.
Compared to an average S&P500 Dividend Yield of 2.35, ROST's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
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
ROST pays out 23.95% of its income as dividend. This is a 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.
DP23.95%
EPS Next 2Y4.83%
EPS Next 3Y6.45%
127.58
-3.59 (-2.74%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners93.94%
Inst Owner Change-0.01%
Ins Owners2.08%
Ins Owner Change4.73%
Market Cap41.73B
Analysts80
Price Target154.39 (21.01%)
Short Float %1.83%
Short Ratio1.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
Yearly Dividend1.47
Dividend Growth(5Y)7.61%
DP23.95%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3%
Min EPS beat(2)0%
Max EPS beat(2)5.99%
EPS beat(4)4
Avg EPS beat(4)3.51%
Min EPS beat(4)0%
Max EPS beat(4)5.99%
EPS beat(8)8
Avg EPS beat(8)5.81%
EPS beat(12)12
Avg EPS beat(12)6.78%
EPS beat(16)15
Avg EPS beat(16)9.48%
Revenue beat(2)0
Avg Revenue beat(2)-2.18%
Min Revenue beat(2)-2.68%
Max Revenue beat(2)-1.68%
Revenue beat(4)0
Avg Revenue beat(4)-2.24%
Min Revenue beat(4)-3.38%
Max Revenue beat(4)-1.22%
Revenue beat(8)2
Avg Revenue beat(8)-0.93%
Revenue beat(12)3
Avg Revenue beat(12)-0.89%
Revenue beat(16)5
Avg Revenue beat(16)-0.6%
PT rev (1m)-0.68%
PT rev (3m)-3.88%
EPS NQ rev (1m)0.21%
EPS NQ rev (3m)-6.41%
EPS NY rev (1m)-3.33%
EPS NY rev (3m)-3.96%
Revenue NQ rev (1m)0.11%
Revenue NQ rev (3m)1.19%
Revenue NY rev (1m)0.22%
Revenue NY rev (3m)0.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.15 | ||
| Fwd PE | 18.37 | ||
| P/S | 1.96 | ||
| P/FCF | 25.97 | ||
| P/OCF | 17.4 | ||
| P/B | 7.48 | ||
| P/tB | 7.48 | ||
| EV/EBITDA | 13.3 |
EPS(TTM)6.33
EY4.96%
EPS(NY)6.95
Fwd EY5.44%
FCF(TTM)4.91
FCFY3.85%
OCF(TTM)7.33
OCFY5.75%
SpS64.99
BVpS17.05
TBVpS17.05
PEG (NY)132.97
PEG (5Y)3.07
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.55% | ||
| ROE | 37.34% | ||
| ROCE | 26.36% | ||
| ROIC | 19.99% | ||
| ROICexc | 32.41% | ||
| ROICexgc | 32.41% | ||
| OM | 12.24% | ||
| PM (TTM) | 9.79% | ||
| GM | 27.78% | ||
| FCFM | 7.56% |
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-Score9
Asset Turnover1.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.18 | ||
| Debt/FCF | 0.94 | ||
| Debt/EBITDA | 0.33 | ||
| Cap/Depr | 174.46% | ||
| Cap/Sales | 3.72% | ||
| Interest Coverage | 34.18 | ||
| Cash Conversion | 78.5% | ||
| Profit Quality | 77.16% | ||
| Current Ratio | 1.55 | ||
| Quick Ratio | 0.95 | ||
| Altman-Z | N/A |
F-Score9
WACC9.4%
ROIC/WACC2.13
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)6.75%
EPS 3Y9.15%
EPS 5Y6.56%
EPS Q2Q%0.68%
EPS Next Y0.15%
EPS Next 2Y4.83%
EPS Next 3Y6.45%
EPS Next 5Y8.51%
Revenue 1Y (TTM)2.49%
Revenue growth 3Y3.76%
Revenue growth 5Y5.67%
Sales Q2Q%2.61%
Revenue Next Year3.97%
Revenue Next 2Y4.24%
Revenue Next 3Y4.5%
Revenue Next 5Y4.84%
EBIT growth 1Y6.47%
EBIT growth 3Y3.49%
EBIT growth 5Y3.8%
EBIT Next Year22.1%
EBIT Next 3Y9.6%
EBIT Next 5Y9.92%
FCF growth 1Y-11.11%
FCF growth 3Y11.5%
FCF growth 5Y0.26%
OCF growth 1Y-4.81%
OCF growth 3Y10.67%
OCF growth 5Y1.65%