Ross Stores (ROST) Beats Market Returns: Some Facts to Consider

Ross Stores (ROST) closed at $146.83 in the latest trading session, marking a +0.1% gain from the previous day. The stock’s performance outpaced the S&P 500’s daily gain of 0.07%. Elsewhere, the Dow Jones lost 0.13%, while the tech-heavy Nasdaq gained 0.14%.

Shares of the discount retailer have risen 1.33% over the past month, underperforming the Retail-Wholesale sector’s gain of 2.94% and the S&P 500’s gain of 4.34%.

Market participants will be closely watching Ross Stores’ financial results when it is released next. The company is expected to report EPS of $1.49, marking a 12.88% increase from the same quarter last year. Meanwhile, the latest consensus estimate is for revenue of $5.24 billion, indicating a 6.1% increase from the same quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $5.97 per share and revenue of $21.2 billion, showing changes of +7.37% and +4.05%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Ross Stores. These recent adjustments often reflect changing dynamics in near-term business models. As a result, positive estimate revisions indicate analyst confidence in the company’s business performance and earnings potential.

Our research suggests that these estimate changes have a direct correlation with future stock price movements. To take advantage of this, we have developed the Zacks Rank, a unique model that incorporates these estimate changes and provides a convenient rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past 30 days, our consensus EPS projection remained stagnant. Currently, Ross Stores holds a Zacks Rank of #3 (Hold).

In terms of valuation, Ross Stores is currently trading at a forward price-to-earnings ratio of 24.58. This represents a premium to the industry average forward price-to-earnings ratio of 21.32.

We can also observe that ROST currently sports a PEG ratio of 2.57. This popular metric is similar to the well-known price-to-earnings ratio, except that the PEG ratio also takes into account the company’s expected earnings growth rate. As of yesterday’s market close, the Retail and Discount Stores industry had an average PEG ratio of 2.56.

The Retail and Discount Stores industry is part of the Retail and Wholesale industry. Currently, this industry is ranked #164 on the Zacks Rank, which puts it in the bottom 35% of more than 250 industries.

The Zacks Industry Rank gauges the strength of our specific industry groups by calculating the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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