ROSS STORES, INC. (ROST) - Comprehensive Stock Analysis & Investment Research
Deep dive into ROSS STORES, INC.'s business profile, financial performance, AI predictions, and competitive positioning to make informed investment decisions.
ROSS STORES, INC. Investment Summary
When evaluating whether ROSS STORES, INC. (ROST) represents a compelling investment opportunity, investors must consider multiple factors including the company's financial health, market position, growth prospects, and what our AI-powered predictive models suggest about its near-term price trajectory.
Company Profile
ROSS STORES, INC. (ROST) operates within the Trade & Services sector, specifically in the Retail-Family Clothing Stores industry. The company employs approximately 28,140 people. With a market capitalization of $59 billion, the company is a large-cap stock offering relative stability combined with growth potential.
Financial Performance Analysis
ROSS STORES, INC. generates annual revenues of approximately $21 billion. The company operates with a net margin of 7.4%, showing modest profitability.
From a profitability standpoint, the company delivers an outstanding Return on Equity (ROE) of 41.1%, demonstrating excellent shareholder value creation and management effectiveness. The Return on Assets (ROA) stands at 11.9%, indicating efficient asset utilization. The gross margin of 26.8% suggests a competitive or commodity-driven business model.
Balance Sheet Strength
Examining the balance sheet health, the current ratio of 1.88x shows adequate liquidity for meeting short-term liabilities. The debt-to-equity ratio of 1.24x shows higher leverage, which increases financial risk but may support growth initiatives.
Cash Flow Generation
ROSS STORES, INC. generates $39 million in annual free cash flow, providing financial flexibility for dividends, share buybacks, debt reduction, or strategic investments. Operating cash flow stands at $570 million, demonstrating the company's ability to generate cash from its core business operations. Year-over-year operating cash flow has changed by 3.4%, indicating steady improvement.
Valuation Analysis
The P/E ratio of 28.6x indicates the market expects above-average growth from this company. Investors are paying a premium for anticipated future earnings expansion. The price-to-book ratio stands at 10.29x, reflecting significant intangible value and market expectations of future growth. For income-focused investors, the current dividend yield of 0.89% offers modest income, with the company likely retaining more earnings for growth.
AI-Powered Price Predictions
Investment Considerations
When determining whether ROSS STORES, INC. is a suitable investment, consider your investment objectives, risk tolerance, and time horizon. As a large-cap stock, ROSS STORES, INC. typically offers more stability but potentially lower growth compared to smaller companies.
This analysis is generated automatically using our proprietary AI systems and should not be considered personalized investment advice. Past performance does not guarantee future results. Always conduct your own research and consider consulting a financial advisor before making investment decisions.
Corporate Identity
ROSS STORES, INC. (Stock Symbol: ROST) is a prominent company operating within the Trade & Services sector, with a specific focus on the Retail-Family Clothing Stores industry. The company's shares are publicly traded on the Nasdaq exchange.
Leadership & Workforce
The organization employs approximately 28,140 professionals worldwide, demonstrating a significant operational footprint and the capacity to support substantial business operations across multiple markets.
Market Classification
With a market capitalization of $59 billion, ROSS STORES, INC. is classified as a large-cap stock. Large-cap companies are well-established industry leaders that typically offer investors relative stability combined with consistent returns. These companies often have diversified revenue streams, established competitive advantages, and the financial resources to weather economic downturns.
Sector & Industry Context
Operating within the Trade & Services sector, ROSS STORES, INC. is subject to the unique dynamics, opportunities, and challenges that characterize this segment of the economy.
Revenue & Growth Analysis
ROSS STORES, INC. generates annual revenues of $21 billion , demonstrating substantial market presence and operational scale. Companies at this revenue level typically benefit from established distribution networks, diversified revenue streams, and meaningful economies of scale.
Profitability Analysis
The company achieves a 7.4% net profit margin, indicating acceptable but modest profitability. This margin level is common in competitive industries or those with high operating costs. There may be opportunities for margin expansion through operational improvements or scale efficiencies.
Gross profit margin stands at 26.8%, a moderate margin common in manufacturing, retail, or distribution-heavy businesses where competition or cost structures limit pricing flexibility.
Market Valuation
Current market capitalization stands at $59 billion . This large-cap valuation typically attracts institutional investors seeking stability and liquidity. Large-cap stocks generally exhibit lower volatility and often pay dividends, making them core portfolio holdings.
Return on Investment Metrics
Return on Equity (ROE) measures 41.1%, demonstrating exceptional efficiency in generating profits from shareholder equity. ROE at this level indicates excellent capital allocation and strong competitive positioning, making the company highly attractive to growth-focused investors.
Return on Assets (ROA) stands at 11.9%, demonstrating solid efficiency in utilizing company assets to generate earnings.
Return on Invested Capital (ROIC) measures 17.3%, demonstrating the company creates meaningful value by earning returns well above its cost of capital.
Cash Flow Generation
Free cash flow generation of $39 million annually indicates positive cash generation, though at a modest level that may limit flexibility for major investments or returns to shareholders.
Operating cash flow reaches $570 million , with year-over-year growth of 3.4%. Operating cash flow represents the cash generated from core business operations before capital investments, providing insight into the sustainability of the company's business model.
Strategic Market Position
ROSS STORES, INC. strategically competes in the highly dynamic Retail-Family Clothing Stores marketplace. As a large-cap market participant, the company has established significant competitive advantages and market presence. Large-cap companies typically benefit from brand recognition, operational scale, diverse revenue streams, and the financial resources to invest in research and development, marketing, and strategic acquisitions. This size category attracts substantial institutional ownership and analyst coverage.
Industry Competitive Landscape
ROSS STORES, INC. competes within the Trade & Services sector, navigating the competitive dynamics and market forces specific to this industry. The company's competitive position depends on its ability to differentiate through product quality, cost efficiency, customer relationships, or other strategic advantages relevant to its specific market segment.
Operational Efficiency
The company shows positive operational efficiency through free cash flow generation of $39 million annually , with year-over-year cash flow growth of 3.4%. Positive free cash flow indicates the business generates more cash than required for operations and capital investments, providing resources for growth initiatives or shareholder returns.
Margin & Pricing Power Analysis
The company maintains a 26.8% gross margin reflecting moderate pricing power typical of many manufacturing, retail, or service businesses. While not exceptionally high, these margins provide adequate room for operating expenses and profit generation. Competitive pressures or cost increases could impact profitability if margins compress.
Asset Utilization Efficiency
Asset turnover ratio of 1.41x indicates solid asset utilization efficiency appropriate for many manufacturing or mixed business models. This level suggests the company generates meaningful revenue from its asset base while maintaining necessary capital investments for operations.
Financial Strength & Leverage
Current ratio of 1.88 indicates adequate liquidity to meet short-term obligations with reasonable cushion. This level balances working capital efficiency with financial safety.