Value
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.4 |
| P/S | 8.4 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.0 |
| PEG | 4.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 25.0x
- ▸PEG: 2.51
ROST · Why this verdict
Why Ross Stores (ROST) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictHOLD
Overall score6.1/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Earnings grew 21% year-over-year and revenue grew 7.6%, placing Ross among the top performers in its peer group on growth metrics, driven by new store openings and improving merchandise margins from better vendor relationships and lower freight costs. Scores | Earnings per share grows by more than 15% year-over-year over the next four quarters as freight normalization and vendor relationship improvements continue to benefit merchandise margin. | →Stable |
| CounterA PEG ratio of 2.80 indicates the market is paying a meaningful premium for current earnings growth; if comparable store sales growth decelerates below 3%, the growth premium embedded in the 27.6 times forward multiple will compress rapidly. | ||
Ross has beaten earnings estimates in each of the last four consecutive quarters with an average positive surprise of 8.5%, reflecting the off-price retail model's structural advantage of attracting value-conscious consumers who increase store visits during periods of economic uncertainty. Earnings | The beat streak extends to six or more consecutive quarters as trade-down consumer behavior from full-price department stores continues to drive above-consensus comparable store sales growth. | →Stable |
| CounterOff-price retailers historically outperform during consumer stress but can face headwinds when economic conditions improve and consumers return to full-price alternatives, potentially reducing the structural tailwind in an eventual recovery. | ||
Return on equity of 39% and a Piotroski F-Score of 9 out of 9 rank Ross as the industry growth leader in its apparel retail peer group, demonstrating that the capital-light off-price model generates exceptional returns without requiring proportional increases in invested capital. Quality breakdown | Return on equity remains above 33% over the next four quarters as comparable store sales growth above 5% drives operating leverage without requiring significant new store capital. | →Stable |
| CounterExtremely high return on equity in retail is often partially driven by share buybacks that reduce equity rather than pure operational improvement; the return on invested capital is a more honest measure of true capital efficiency. | ||
The current price of $236.77 is within 2.5% of its 52-week high and at a technical resistance target of $237.95, leaving essentially zero near-term upside from current levels and making new position entry unattractive without a significant pullback. Warnings | Analyst consensus targets are revised upward to above $265 within 12 months following continued earnings beats, restoring a more attractive entry risk-reward profile for new investors. | →Stable |
| CounterFor consistently compounding retailers with wide moats, trading near 52-week highs is normal and often precedes further appreciation as earnings growth creates new price ceilings; resistance levels are frequently broken in high-quality compounder stocks. | ||
Earnings grew 21% year-over-year and revenue grew 7.6%, placing Ross among the top performers in its peer group on growth metrics, driven by new store openings and improving merchandise margins from better vendor relationships and lower freight costs.
→StableScores
- Expectation
- Earnings per share grows by more than 15% year-over-year over the next four quarters as freight normalization and vendor relationship improvements continue to benefit merchandise margin.
CounterA PEG ratio of 2.80 indicates the market is paying a meaningful premium for current earnings growth; if comparable store sales growth decelerates below 3%, the growth premium embedded in the 27.6 times forward multiple will compress rapidly.
Ross has beaten earnings estimates in each of the last four consecutive quarters with an average positive surprise of 8.5%, reflecting the off-price retail model's structural advantage of attracting value-conscious consumers who increase store visits during periods of economic uncertainty.
→StableEarnings
- Expectation
- The beat streak extends to six or more consecutive quarters as trade-down consumer behavior from full-price department stores continues to drive above-consensus comparable store sales growth.
CounterOff-price retailers historically outperform during consumer stress but can face headwinds when economic conditions improve and consumers return to full-price alternatives, potentially reducing the structural tailwind in an eventual recovery.
Return on equity of 39% and a Piotroski F-Score of 9 out of 9 rank Ross as the industry growth leader in its apparel retail peer group, demonstrating that the capital-light off-price model generates exceptional returns without requiring proportional increases in invested capital.
→StableQuality breakdown
- Expectation
- Return on equity remains above 33% over the next four quarters as comparable store sales growth above 5% drives operating leverage without requiring significant new store capital.
CounterExtremely high return on equity in retail is often partially driven by share buybacks that reduce equity rather than pure operational improvement; the return on invested capital is a more honest measure of true capital efficiency.
The current price of $236.77 is within 2.5% of its 52-week high and at a technical resistance target of $237.95, leaving essentially zero near-term upside from current levels and making new position entry unattractive without a significant pullback.
→StableWarnings
- Expectation
- Analyst consensus targets are revised upward to above $265 within 12 months following continued earnings beats, restoring a more attractive entry risk-reward profile for new investors.
CounterFor consistently compounding retailers with wide moats, trading near 52-week highs is normal and often precedes further appreciation as earnings growth creates new price ceilings; resistance levels are frequently broken in high-quality compounder stocks.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Ross Stores is an off-price apparel retailer with a perfect four-quarter earnings beat streak, 39% return on equity, and 21% year-over-year earnings growth, currently trading at full value with essentially zero near-term upside to analyst resistance targets following a strong price run.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 8.1 |
| Gross margin | 2.5 |
| Op margin | 5.4 |
| Net margin | 4.9 |
| Current ratio | 5.6 |
| FCF quality | 6.4 |
| Moat | 6.8 |
| Piotroski F | 10.0 |
- ▸Excellent ROE: 39%
- ▸Strong Piotroski F-Score: 9/9
Growth
8.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.6 |
| EPS growth | 9.5 |
- ▸Strong growth: 21% YoY
Momentum
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.7 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 2.9 |
- ▸Oversold in uptrend (RSI 20)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.4 |
| Price target | 7.8 |
| erm sentiment | 4.6 |
- ▸Analyst upside: 21%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.4 |
| quality rank | 7.0 |
| growth rank | 9.3 |
- ▸Industry growth leader
Technical
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.4 |
| support resistance | 8.5 |
| 52w position | 7.4 |
Risk (lower is worse)
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.1 |
| days to cover | 7.7 |
| volatility | 5.1 |
| put call | 9.4 |
| implied vol | 4.1 |
| beta | 7.7 |
| debt equity | 6.5 |
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.8 |
| dividend safety | 5.2 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 83.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- ASYMMETRY:1.5>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:46d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.3<4.5
Warning (0)
none
Reward-to-Risk
1.53
Upside
+9.1%
Downside
5.9%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: ASYMMETRY:1.5>=1.5. Top dim: Growth at 8.6; weakest: Momentum at 3.3. No conviction either direction.
The strongest dimensions are Growth at 8.6, Technical at 8.1, and Risk (lower is worse) at 6.9; the weakest are Momentum at 3.3, Value at 4.7, and Insider at 5.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 1.53 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak Off Price
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters, ending the sustained beat pattern and signaling the trade-down tailwind is reversing.
- P2Industry Leading Return On Equity
Trip ifReturn on equity falls below 30% for 2 consecutive quarters, indicating operating leverage is deteriorating from new store costs or margin compression.
- P3Price At Resistance Near 52 Week High
Trip ifPrice falls below $210, more than 11% below the current $236.77, indicating the resistance at the 52-week high has turned into a ceiling with significant mean reversion.
- P4Strong Earnings Growth 21 Pct
Trip ifRevenue growth falls below 5% year-over-year in any reported quarter, indicating comparable store sales momentum is decelerating toward the industry average.