Ross Stores (ROST): Assessing Valuation Following New dd’s DISCOUNTS Expansion and Growth Push

If you are watching Ross Stores (ROST) for your next move, there is a fresh event that could sway your thinking. The company just unveiled a wave of new dd's DISCOUNTS openings, each set to throw open its doors and welcome more shoppers into the Ross ecosystem. On top of bringing deep-discount fashion and home goods to new neighborhoods, these stores will add dozens of jobs to their local economies. In a retail environment where every square foot matters, that sort of expansion hints at continued confidence from management about untapped demand and the health of its off-price model.

This push comes at a time when Ross Stores’ performance is showing steady progress. Over the past three months, shares have climbed a healthy 18%, far outpacing their modest 1% gain over the last year. The company’s ability to steadily expand while delivering on sales and earnings growth keeps momentum on its side heading into the year’s final quarter. Recent news of upbeat revenue growth and ongoing job creation strengthens the picture, particularly when peers have struggled to generate consistent gains.

After this recent move and the run-up in the stock, the real question is, are investors being offered an opportunity to buy into future growth, or has the market already captured what comes next in Ross’s price?

Most Popular Narrative: 5% Undervalued

According to the most popular narrative, Ross Stores is trading below its estimated fair value, suggesting room for upside based on current projections and discounted future earnings.

Investments in supply chain infrastructure and operational initiatives (e.g., new distribution center, store refreshes, rollout of self-checkout) are establishing a foundation for greater operating leverage and cost discipline. This should benefit net margins as these investments scale. Ongoing disruption among traditional retailers and continued vendor access to high-quality branded closeouts reinforce Ross's ability to deliver a compelling value proposition and maintain favorable gross margins, supporting long-term earnings growth even in a challenging macro environment.

Curious what lies behind this fair value call? The narrative points to a bold vision: future earnings power, resilient margins, and a profit multiple often reserved for high-growth stocks. Discover the surprising assumptions that analysts are betting on to drive the next chapter of Ross Stores' success.

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 or the ongoing lack of a robust digital presence could quickly challenge even the strongest bull case for Ross Stores.

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

Another View: What About Market Comparisons?

If we look at Ross Stores through the lens of market valuations, the company appears expensive relative to similar retailers, based on its current trading price. Does the market know something the models do not, or is optimism running ahead of fundamentals?

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

Stay updated when valuation signals shift by adding Ross Stores to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Ross Stores Narrative

Of course, if you see the story playing out differently or want to run your own numbers, you can quickly build your own perspective in just a few minutes with our tools. Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Ross Stores.

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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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