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 in the United States. More info.
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value. We use
analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (USD, Millions)||$1,350.34||$1,329.14||$1,436.80||$1,557.30||$1,602.00|
|Source||Analyst x10||Analyst x7||Analyst x2||Analyst x2||Analyst x1|
Discounted (@ 8.49%)
Present value of next 5 years cash flows:
Terminal Value = FCF2022 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $1,602 × (1 + 2.47%) ÷ (8.49% – 2.47%)
Terminal value based on the Perpetuity Method where growth (g) =
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows +
$23,816 = $5,689 + $18,128
Value = Total value / Shares Outstanding ($23,816 / 382)Discount to Share Price
Value per share:
Current discount (share price of $81.65): -31.01%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 8.49% = 2.47% + (0.8 * 7.53%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($31,202,220,655).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.796 = 0.789 (1 + (1- 35%) (1.27%))
Levered Beta used in calculation = 0.8
Ms. Barbara Rentler has been the Chief Executive Officer of Ross Stores Inc since June 2014. Ms. Rentler served as the President and Chief Merchandising Officer of Ross Dress for Less at Ross Stores Inc since December 2009 until June 2014. She served as Executive Vice President of Merchandising at Ross Stores Inc. from December 11, 2006 to December 2009. Ms. Rentler served as Senior Vice President and General Merchandising Manager of Ross Stores Inc. from March 2001 to February 08, 2005. She served as Chief Merchandising Officer and Executive Vice President of dd's DISCOUNTS(SM) at Ross Stores Inc. from February 08, 2005 to December 11, 2006. She joined Ross in February 1986 and served as Vice President and Group Divisional Merchandise Manager from March 1999 to February 2001. She served as Vice President and Divisional Merchandise Manager of Ross Stores from March 1996 to February 1999. She served as Counselor at Ross Stores Inc. from December 1993 to February 1996. She has been Director of Ross Stores Inc. since June 2014.
Average tenure and age of the Ross Stores management team in years:
Average tenure and age of the Ross Stores board of directors in years:
5-year cash flow estimate 2018 2019 2020 2021 2022 Levered FCF ($, Millions) $1,320.34 $1,329.14 $1,436.80 $1,557.30 $1,602.00 Source Analyst x10 Analyst x7 Analyst x2 Analyst x2 Analyst x1 Present Value Discounted @ 8.49% $1,216.97 $1,129.17 $1,125.07 $1,123.96 $1,065.70 Present Value of 5-year Cash Flow (PVCF)= $5,661 The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. … Terminal Value (TV) = FCF2022 × (1 + g) ÷ (r – g) = $1,602 × (1 + 2.5%) ÷ (8.5% – 2.5%) = $27,250 Present Value of Terminal Value (PVTV) = TV / (1 + r)5 = $27,250 / ( 1 + 8.5%)5 = $18,128 The total value is the sum of cash flows for the next five years and the discounted terminal value, which results in the Total Equity Value, which in this case is $23,789. … NasdaqGS:ROST Intrinsic Value Jan 9th 18 The assumptions Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows.Simply Wall St - – Full article
To get a preliminary understanding, I will try to evaluate Ross Stores's margin behaviour to assist in analysing the revenue and cost anatomy behind the earnings expectations for the future and the impact it has on shareholder returns relative to the wider industry. … Margin Calculation for ROST Profit Margin = Net Income ÷ Revenue ∴ Profit Margin = 1.21 Billion ÷ 13.58 Billion = 8.93% Ross Stores's margin has expanded in the past five years, with a 10.33% average growth in net income exceeding average revenue growth of 7.80%, which means that the previous increase in revenue has coincided with a larger portion falling to the bottom line. … Thus, it is essential to run your own analysis on Ross Stores's future earnings whilst maintaining a watchful eye over the sustainability of their cost management methods and the runway for top line growth.Simply Wall St - – Full article
Check out our latest analysis for Ross Stores Breaking down Return on Equity Return on Equity (ROE) is a measure of ROST’s profit relative to its shareholders’ equity. … Return on Equity = Net Profit ÷ Shareholders Equity Returns are usually compared to costs to measure the efficiency of capital. … This is called the Dupont Formula: Dupont Formula ROE = profit margin × asset turnover × financial leverage ROE = (annual net profit ÷ sales) × (sales ÷ assets) × (assets ÷ shareholders’ equity) ROE = annual net profit ÷ shareholders’ equity NasdaqGS:ROST Last Perf Dec 9th 17 The first component is profit margin, which measures how much of sales is retained after the company pays for all its expenses.Simply Wall St - – Full article
For ROST, the debt-to-equity ratio is 13.88%, which means its debt level does not pose a threat to its operations right now. … ROST’s recent operating cash flow exceeded its debt obligations within the past year,which means ROST generates enough money in a year through its operations to pay off its near-term debt. … ROST’s relatively safe debt levels is even more impressive due to its ability to generate high cash flow, which illustrates operating efficiency.Simply Wall St - – Full article
Ross Stores Inc (NASDAQ:ROST) is expected to deliver a solid 37.76% in earnings growth per share over the next three years. … To assess the reasonability of ROST’s earnings growth per share, we should look at its most recent growth rate delivered. … This illustrates a relatively optimistic outlook in the near term, with a relatively solid earnings per share growth rate of 37.76% over the next few years.Simply Wall St - – Full article
View our latest analysis for Ross Stores How ROST fared against its long-term earnings performance and its industry For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. … Well, let’s take a look at whether it is merely owing to an industry uplift, or if Ross Stores has seen some company-specific growth. … This suggests that any uplift the industry is benefiting from, Ross Stores is capable of leveraging this to its advantage.What does this mean?Simply Wall St - – Full article
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 in the United States. It primarily offers apparel, accessories, footwear, and home fashions. The company’s Ross Dress for Less stores sell its products at savings of 20% to 60% off department and specialty store regular prices primarily to middle income households; and dd’s DISCOUNTS stores sell its products at savings of 20% to 70% off moderate department and discount store regular prices to customers from households with moderate income. As of October 9, 2017, it operated 1,412 Ross Dress for Less stores in 37 states, the District of Columbia, and Guam; and 205 dd's DISCOUNTS stores in 16 states. The company was founded in 1982 and is headquartered in Dublin, California.
|Name:||Ross Stores, Inc.|
Ross Stores, Inc.
5130 Hacienda Drive,
|Exchange Symbol||Ticker Symbol||Security||Exchange||Country||Currency||Listed on|
|NasdaqGS||ROST||Common Stock||Nasdaq Global Select||US||USD||08. Aug 1985|
|DB||RSO||Common Stock||Deutsche Boerse AG||DE||EUR||08. Aug 1985|
|WBAG||ROST||Common Stock||Wiener Boerse AG||AT||EUR||08. Aug 1985|
|BMV||ROST *||Common Stock||Bolsa Mexicana de Valores||MX||MXN||08. Aug 1985|
|BOVESPA||ROST34||BDR EACH REPR 1/2 COM USD0.01||Bolsa de Valores de Sao Paulo||BR||BRL||25. Apr 2016|
|Company Analysis updated:||2018/01/19|
|Last estimates confirmation:||2018/01/17|
|Last earnings update:||2017/10/28|
|Last annual earnings update:||2017/01/28|
All dates in UTC. All financial data provided by Standard & Poor’s Capital IQ.
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.