NasdaqGS:ROST

Stock Analysis Report

Executive Summary

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 brands.

Rewards

Trading at 13.6% below its fair value

Earnings are forecast to grow 9.2% per year

Earnings have grown 13.4% per year over the past 5 years

Pays a reliable dividend of 0.86%

Risk Analysis

No risks detected for ROST from our risk checks.


Snowflake Analysis

Flawless balance sheet average dividend payer.


Similar Companies

Share Price & News

How has Ross Stores's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ROST has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.1%

ROST

0.6%

US Specialty Retail

-0.09%

US Market


1 Year Return

29.6%

ROST

23.3%

US Specialty Retail

23.9%

US Market

Return vs Industry: ROST exceeded the US Specialty Retail industry which returned 23.7% over the past year.

Return vs Market: ROST exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

ROSTIndustryMarket
7 Day0.1%0.6%-0.09%
30 Day2.7%1.1%3.1%
90 Day6.8%6.8%10.4%
1 Year30.9%29.6%25.3%23.3%26.6%23.9%
3 Year85.8%80.3%46.3%38.8%50.9%41.2%
5 Year165.1%152.5%49.3%36.6%78.1%58.5%

Price Volatility Vs. Market

How volatile is Ross Stores's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Ross Stores undervalued compared to its fair value and its price relative to the market?

14.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ROST ($118.96) is trading below our estimate of fair value ($137.68)

Significantly Below Fair Value: ROST is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ROST is poor value based on its PE Ratio (26.1x) compared to the Specialty Retail industry average (17.1x).

PE vs Market: ROST is poor value based on its PE Ratio (26.1x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: ROST is poor value based on its PEG Ratio (2.8x)


Price to Book Ratio

PB vs Industry: ROST is overvalued based on its PB Ratio (13x) compared to the US Specialty Retail industry average (1.5x).


Next Steps

Future Growth

How is Ross Stores forecast to perform in the next 1 to 3 years based on estimates from 24 analysts?

9.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ROST's forecast earnings growth (9.2% per year) is above the savings rate (1.7%).

Earnings vs Market: ROST's earnings (9.2% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: ROST's earnings are forecast to grow, but not significantly.

Revenue vs Market: ROST's revenue (6.7% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: ROST's revenue (6.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ROST's Return on Equity is forecast to be very high in 3 years time (55.2%).


Next Steps

Past Performance

How has Ross Stores performed over the past 5 years?

13.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ROST has high quality earnings.

Growing Profit Margin: ROST's current net profit margins (10.5%) are lower than last year (10.7%).


Past Earnings Growth Analysis

Earnings Trend: ROST's earnings have grown by 13.4% per year over the past 5 years.

Accelerating Growth: ROST's earnings growth over the past year (3.2%) is below its 5-year average (13.4% per year).

Earnings vs Industry: ROST earnings growth over the past year (3.2%) underperformed the Specialty Retail industry 4.5%.


Return on Equity

High ROE: ROST's Return on Equity (50.2%) is considered outstanding.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Ross Stores's financial position?


Financial Position Analysis

Short Term Liabilities: ROST's short term assets ($3.6B) exceed its short term liabilities ($2.9B).

Long Term Liabilities: ROST's short term assets ($3.6B) exceed its long term liabilities ($3.3B).


Debt to Equity History and Analysis

Debt Level: ROST's debt to equity ratio (9.5%) is considered satisfactory.

Reducing Debt: ROST's debt to equity ratio has reduced from 18.2% to 9.5% over the past 5 years.

Debt Coverage: ROST's debt is well covered by operating cash flow (648.2%).

Interest Coverage: ROST earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: ROST has a high level of physical assets or inventory.

Debt Coverage by Assets: ROST's debt is covered by short term assets (assets are 11.5x debt).


Next Steps

Dividend

What is Ross Stores's current dividend yield, its reliability and sustainability?

0.86%

Current Dividend Yield


Dividend Yield vs Market

company0.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Years1.0%

Current dividend yield vs market & industry

Notable Dividend: ROST's dividend (0.86%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: ROST's dividend (0.86%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: ROST's dividends per share have been stable in the past 10 years.

Growing Dividend: ROST's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (22.4%), ROST's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ROST's dividends in 3 years are forecast to be well covered by earnings (22.9% payout ratio).


Next Steps

Management

What is the CEO of Ross Stores's salary, the management and board of directors tenure and is there insider trading?

5.6yrs

Average management tenure


CEO

Barbara Rentler (62yo)

5.6yrs

Tenure

US$12,248,994

Compensation

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 si ...


CEO Compensation Analysis

Compensation vs Market: Barbara's total compensation ($USD12.25M) is about average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Barbara's compensation has been consistent with company performance over the past year.


Management Age and Tenure

5.6yrs

Average Tenure

54yo

Average Age

Experienced Management: ROST's management team is seasoned and experienced (5.6 years average tenure).


Board Age and Tenure

5.6yrs

Average Tenure

68yo

Average Age

Experienced Board: ROST's board of directors are considered experienced (5.6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$2,750,36302 Oct 19
Barbara Rentler
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares25,000
Max PriceUS$110.01
SellUS$2,676,52006 Sep 19
Barbara Rentler
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares25,000
Max PriceUS$107.06
SellUS$8,937,20315 Jul 19
James Fassio
EntityIndividual
Role
Senior Key Executive
Chief Development Officer
Shares85,238
Max PriceUS$105.13
SellUS$3,070,76915 Jul 19
George Orban
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares29,000
Max PriceUS$106.07
SellUS$102,50012 Jul 19
George Orban
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares1,000
Max PriceUS$102.50
SellUS$1,005,10018 Jun 19
Barbara Rentler
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares10,000
Max PriceUS$100.51
SellUS$3,966,53713 Jun 19
Barbara Rentler
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares40,000
Max PriceUS$99.50
SellUS$4,346,58304 Jun 19
Michael Balmuth
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares46,799
Max PriceUS$92.88
SellUS$1,813,56703 Apr 19
Bernard Brautigan
EntityIndividual
Role
Unit President
President of Merchandising- Ross Dress for Less
Shares19,384
Max PriceUS$93.56
SellUS$907,85222 Mar 19
Michael Hartshorn
EntityIndividual
Role
President
Group President & COO
Shares9,924
Max PriceUS$91.48
SellUS$784,66921 Mar 19
Bernard Brautigan
EntityIndividual
Role
Unit President
President of Merchandising- Ross Dress for Less
Shares8,612
Max PriceUS$91.11
SellUS$920,00021 Mar 19
Brian Morrow
EntityIndividual
Shares10,000
Max PriceUS$92.00
SellUS$1,781,38719 Mar 19
Michael Balmuth
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares20,057
Max PriceUS$88.82
SellUS$1,094,14919 Mar 19
Bernard Brautigan
EntityIndividual
Role
Unit President
President of Merchandising- Ross Dress for Less
Shares12,000
Max PriceUS$91.18

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Jim Fassio (64yo)

    Chief Development Officer

    • Tenure: 28.8yrs
    • Compensation: US$6.34m
  • Barbara Rentler (62yo)

    CEO & Director

    • Tenure: 5.6yrs
    • Compensation: US$12.25m
  • Gary Cribb (54yo)

    Senior Group Executive Vice President of Stores & Loss Prevention

    • Tenure: 17.4yrs
  • Michael Kobayashi (55yo)

    President of Operations & Technology

    • Tenure: 5.7yrs
    • Compensation: US$2.26m
  • Ken Caruana

    Executive VP of Strategy

    • Bernie Brautigan (54yo)

      President of Merchandising- Ross Dress for Less

      • Tenure: 3.8yrs
      • Compensation: US$4.84m
    • Michael Hartshorn (51yo)

      Group President & COO

      • Tenure: 0.4yrs
      • Compensation: US$3.31m
    • Connie Kao

      Vice President - Investor Relations

      • Travis Marquette (47yo)

        Group Senior VP & CFO

        • Tenure: 0.4yrs
      • Ken Jew

        Group Senior VP


        Board Members

        • Michael Bush (58yo)

          Independent Director

          • Tenure: 19yrs
          • Compensation: US$241.02k
        • Norman Ferber (70yo)

          Chairman Emeritus

          • Tenure: 5.6yrs
          • Compensation: US$2.44m
        • Michael Balmuth (68yo)

          Chairman of the Board

          • Tenure: 5.6yrs
          • Compensation: US$9.39m
        • George Orban (73yo)

          Lead Independent Director

          • Tenure: 1yrs
          • Compensation: US$262.02k
        • Greg Quesnel (70yo)

          Independent Director

          • Tenure: 10.7yrs
          • Compensation: US$303.77k
        • Sharon Garrett (70yo)

          Independent Director

          • Tenure: 20yrs
          • Compensation: US$241.02k
        • Barbara Rentler (62yo)

          CEO & Director

          • Tenure: 5.6yrs
          • Compensation: US$12.25m
        • K. Bjorklund (60yo)

          Independent Director

          • Tenure: 17yrs
          • Compensation: US$243.27k
        • Steve Milligan (56yo)

          Independent Director

          • Tenure: 5yrs
          • Compensation: US$241.02k

        Company Information

        Ross Stores, Inc.'s company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Ross Stores, Inc.
        • Ticker: ROST
        • Exchange: NasdaqGS
        • Founded: 1982
        • Industry: Apparel Retail
        • Sector: Retail
        • Market Cap: US$42.423b
        • Shares outstanding: 358.88m
        • Website: https://www.rossstores.com

        Number of Employees


        Location

        • Ross Stores, Inc.
        • 5130 Hacienda Drive
        • Dublin
        • California
        • 94568
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        ROSTNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDAug 1985
        RSODB (Deutsche Boerse AG)YesCommon StockDEEURAug 1985
        ROST *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNAug 1985
        0KXOLSE (London Stock Exchange)YesCommon StockGBUSDAug 1985
        ROSTWBAG (Wiener Boerse AG)YesCommon StockATEURAug 1985
        RSOETLX (Eurotlx)YesCommon StockITEURAug 1985
        ROST34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1/2 COM USD0.01BRBRLApr 2016
        ROSTBASE (Buenos Aires Stock Exchange)CEDEAR EACH 4 REP 1 COM USD0.01ARARSApr 2019

        Biography

        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 brands. Its stores primarily offers apparel, accessories, footwear, and home fashions. The company’s Ross Dress for Less stores sell its products at department and specialty stores primarily to middle income households; and dd’s DISCOUNTS stores sell its products at department and discount stores regular prices to customers from households with moderate income. As of October 14, 2019, it operated approximately 1,811 off-price apparel and home fashion stores under the Ross Dress for Less and dd's DISCOUNTS names in 39 states, the District of Columbia, and Guam. The company was founded in 1982 and is headquartered in Dublin, California. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/23 23:54
        End of Day Share Price2020/01/23 00:00
        Earnings2019/11/02
        Annual Earnings2019/02/02


        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.