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 121 industry peers in the Specialty Retail industry. ROST gets an excellent profitability rating and is at the same time showing great financial health properties. ROST is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
ROST had positive earnings in the past year.
ROST had a positive operating cash flow in the past year.
In the past 5 years ROST has always been profitable.
In the past 5 years ROST always reported a positive cash flow from operatings.
1.2 Ratios
ROST's Return On Assets of 14.03% is amongst the best of the industry. ROST outperforms 88.43% of its industry peers.
ROST has a Return On Equity of 37.95%. This is amongst the best in the industry. ROST outperforms 90.91% of its industry peers.
Looking at the Return On Invested Capital, with a value of 19.14%, ROST belongs to the top of the industry, outperforming 87.60% 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 12.74%.
The last Return On Invested Capital (19.14%) for ROST is above the 3 year average (17.29%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.03% | ||
| ROE | 37.95% | ||
| ROIC | 19.14% |
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
Looking at the Profit Margin, with a value of 9.89%, ROST belongs to the top of the industry, outperforming 89.26% of the companies in the same industry.
In the last couple of years the Profit Margin of ROST has remained more or less at the same level.
Looking at the Operating Margin, with a value of 12.24%, ROST belongs to the top of the industry, outperforming 85.95% of the companies in the same industry.
ROST's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 27.78%, ROST is doing worse than 69.42% of the companies in the same industry.
ROST's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.24% | ||
| PM (TTM) | 9.89% | ||
| 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
ROST has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
ROST has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, ROST has less shares outstanding
ROST has a better debt/assets ratio than last year.
2.2 Solvency
ROST has an Altman-Z score of 5.81. This indicates that ROST is financially healthy and has little risk of bankruptcy at the moment.
ROST's Altman-Z score of 5.81 is amongst the best of the industry. ROST outperforms 91.74% of its industry peers.
The Debt to FCF ratio of ROST is 1.35, which is an excellent value as it means it would take ROST, only 1.35 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ROST (1.35) is better than 76.86% of its industry peers.
A Debt/Equity ratio of 0.28 indicates that ROST is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.28, ROST perfoms like the industry average, outperforming 57.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 1.35 | ||
| Altman-Z | 5.81 |
ROIC/WACC1.97
WACC9.72%
2.3 Liquidity
A Current Ratio of 1.62 indicates that ROST should not have too much problems paying its short term obligations.
ROST has a better Current ratio (1.62) than 66.94% of its industry peers.
A Quick Ratio of 1.09 indicates that ROST should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.09, ROST is doing good in the industry, outperforming 75.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.62 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.75% over the past year.
The Earnings Per Share has been growing slightly by 6.56% on average over the past years.
ROST shows a small growth in Revenue. In the last year, the Revenue has grown by 3.69%.
ROST shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.67% yearly.
EPS 1Y (TTM)6.75%
EPS 3Y9.15%
EPS 5Y6.56%
EPS Q2Q%0.68%
Revenue 1Y (TTM)3.69%
Revenue growth 3Y3.76%
Revenue growth 5Y5.67%
Sales Q2Q%2.61%
3.2 Future
Based on estimates for the next years, ROST will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.14% on average per year.
Based on estimates for the next years, ROST will show a small growth in Revenue. The Revenue will grow by 5.53% on average per year.
EPS Next Y3.6%
EPS Next 2Y5.85%
EPS Next 3Y6.63%
EPS Next 5Y9.14%
Revenue Next Year3.67%
Revenue Next 2Y4.22%
Revenue Next 3Y4.6%
Revenue Next 5Y5.53%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
ROST is valuated rather expensively with a Price/Earnings ratio of 24.05.
61.16% of the companies in the same industry are more expensive than ROST, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 25.91, ROST is valued at the same level.
ROST is valuated rather expensively with a Price/Forward Earnings ratio of 21.50.
The rest of the industry has a similar Price/Forward Earnings ratio as ROST.
When comparing the Price/Forward Earnings ratio of ROST to the average of the S&P500 Index (21.85), we can say ROST is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.05 | ||
| Fwd PE | 21.5 |
4.2 Price Multiples
ROST's Enterprise Value to EBITDA ratio is in line with the industry average.
ROST's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.59 | ||
| EV/EBITDA | 15.68 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ROST does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of ROST may justify a higher PE ratio.
PEG (NY)6.68
PEG (5Y)3.67
EPS Next 2Y5.85%
EPS Next 3Y6.63%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.06%, ROST has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 5.14, ROST pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.06, ROST pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.06% |
5.2 History
The dividend of ROST is nicely growing with an annual growth rate of 7.61%!
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 Years3
Div Non Decr Years3
5.3 Sustainability
23.38% of the earnings are spent on dividend by ROST. This is a low number and sustainable payout ratio.
The dividend of ROST is growing, but earnings are growing more, so the dividend growth is sustainable.
DP23.38%
EPS Next 2Y5.85%
EPS Next 3Y6.63%
152.25
-0.43 (-0.28%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners94.25%
Inst Owner Change-0.78%
Ins Owners2.06%
Ins Owner Change11.22%
Market Cap50.06B
Analysts80.71
Price Target159.15 (4.53%)
Short Float %1.68%
Short Ratio1.58
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.06% |
Yearly Dividend1.47
Dividend Growth(5Y)7.61%
DP23.38%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.96%
Min EPS beat(2)3.93%
Max EPS beat(2)5.99%
EPS beat(4)4
Avg EPS beat(4)5.11%
Min EPS beat(4)3.93%
Max EPS beat(4)6.41%
EPS beat(8)8
Avg EPS beat(8)5.94%
EPS beat(12)11
Avg EPS beat(12)5.89%
EPS beat(16)15
Avg EPS beat(16)12.52%
Revenue beat(2)0
Avg Revenue beat(2)-3.03%
Min Revenue beat(2)-3.38%
Max Revenue beat(2)-2.68%
Revenue beat(4)0
Avg Revenue beat(4)-2.19%
Min Revenue beat(4)-3.38%
Max Revenue beat(4)-1.22%
Revenue beat(8)2
Avg Revenue beat(8)-0.97%
Revenue beat(12)3
Avg Revenue beat(12)-1.28%
Revenue beat(16)6
Avg Revenue beat(16)0.4%
PT rev (1m)-0.92%
PT rev (3m)-7.29%
EPS NQ rev (1m)0.56%
EPS NQ rev (3m)-6.49%
EPS NY rev (1m)-0.39%
EPS NY rev (3m)-4.51%
Revenue NQ rev (1m)0.12%
Revenue NQ rev (3m)-3.18%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)-1.7%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.05 | ||
| Fwd PE | 21.5 | ||
| P/S | 2.37 | ||
| P/FCF | 30.59 | ||
| P/OCF | 21.24 | ||
| P/B | 9.09 | ||
| P/tB | 9.09 | ||
| EV/EBITDA | 15.68 |
EPS(TTM)6.33
EY4.16%
EPS(NY)7.08
Fwd EY4.65%
FCF(TTM)4.98
FCFY3.27%
OCF(TTM)7.17
OCFY4.71%
SpS64.26
BVpS16.75
TBVpS16.75
PEG (NY)6.68
PEG (5Y)3.67
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.03% | ||
| ROE | 37.95% | ||
| ROCE | 25.24% | ||
| ROIC | 19.14% | ||
| ROICexc | 35.57% | ||
| ROICexgc | 35.57% | ||
| OM | 12.24% | ||
| PM (TTM) | 9.89% | ||
| GM | 27.78% | ||
| FCFM | 7.75% |
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-Score7
Asset Turnover1.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 1.35 | ||
| Debt/EBITDA | 0.5 | ||
| Cap/Depr | 161.17% | ||
| Cap/Sales | 3.41% | ||
| Interest Coverage | 32.19 | ||
| Cash Conversion | 77.73% | ||
| Profit Quality | 78.29% | ||
| Current Ratio | 1.62 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z | 5.81 |
F-Score7
WACC9.72%
ROIC/WACC1.97
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 Y3.6%
EPS Next 2Y5.85%
EPS Next 3Y6.63%
EPS Next 5Y9.14%
Revenue 1Y (TTM)3.69%
Revenue growth 3Y3.76%
Revenue growth 5Y5.67%
Sales Q2Q%2.61%
Revenue Next Year3.67%
Revenue Next 2Y4.22%
Revenue Next 3Y4.6%
Revenue Next 5Y5.53%
EBIT growth 1Y12.04%
EBIT growth 3Y3.49%
EBIT growth 5Y3.8%
EBIT Next Year23.92%
EBIT Next 3Y12%
EBIT Next 5Y11.01%
FCF growth 1Y-6.55%
FCF growth 3Y11.5%
FCF growth 5Y0.26%
OCF growth 1Y-6.26%
OCF growth 3Y10.67%
OCF growth 5Y1.65%