A Look at Ross Stores’s Valuation as New Store Openings Expand Its Retail Footprint

Ross Stores (ROST) has announced the upcoming opening of several new Ross Dress for Less and dd's DISCOUNTS locations across different states, with grand openings set for October. This expansion is bringing new job opportunities and widening the company’s retail reach.

See our latest analysis for Ross Stores.

Ross Stores has been steadily expanding its presence, and these latest store openings appear to be supporting a sense of momentum around the stock. While the recent gains in share price have been relatively modest, with the one-year total shareholder return sitting at about 6%, the longer-term three-year total shareholder return is far more robust at over 81%. This indicates that investors who stuck with Ross Stores over the years have seen meaningful rewards even as the short-term picture looks more balanced.

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Given these developments and the company's longer-term performance, investors are now asking whether Ross Stores is flying under the radar and undervalued, or if the current share price already reflects all its future growth potential.

Most Popular Narrative: 4.3% Undervalued

Ross Stores' last close price sits just below the most popular narrative’s fair value estimate, suggesting new growth drivers may be overlooked. The small discount creates an intriguing setup for what is driving analyst optimism behind the scenes.

The expansion into new and underpenetrated geographic markets, including successful entries into the New York Metro area and Puerto Rico, leverages ongoing population shifts to urban and suburban clusters. This provides a tangible runway for both revenue and earnings growth through increased store count and enhanced productivity of new locations.

Read the complete narrative.

Curious why analysts set a premium price target? The narrative relies on a bold revenue ramp, stable profit margins, and projections that extend beyond the usual retail multiples. Could forward-looking earnings fuel this valuation? Dive in to see which strategic bets, growth assumptions, and market shifts underpin the consensus fair value calculation.

Result: Fair Value of $159.47 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent cost pressures and the absence of a robust digital presence could present challenges for Ross Stores’ growth story if these headwinds continue.

Find out about the key risks to this Ross Stores narrative.

Another View: Multiples Send a Different Signal

While the fair value estimate paints Ross Stores as undervalued, using the price-to-earnings ratio reveals a different story. Ross trades at 24.1 times earnings, noticeably above the industry average of 17.3 and the peer average of 21. The fair ratio sits even lower at just 18.3. This gap suggests the market is pricing in higher expectations, so is there more risk here than meets the eye?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Ross Stores Narrative

If you see the numbers differently or want to explore your own angle, you can shape a personal view of the Ross Stores story in just a few minutes. Do it your way

A great starting point for your Ross Stores research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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