ROST
Ross Stores, Inc.$213.67
Sell
Target $186.37
Report: Mar 07, 2026Consumer Cyclical • Apparel - Retail • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$213.67-12.8%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$186.37
(13% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$217.51
52 Week Low$124.07
Avg. 3 Month Volume2.60M
Efficiency
LTM Gross Margin27.7%
LTM EBITDA Margin14.1%
LTM EBIT Margin11.9%
LTM Operating Margin11.9%
LTM ROA14.4%
LTM ROE36.7%
LTM ROIC23.9%
LTM ROCE26.4%
Capital Structure
Market Cap (MM)$69.8B
Enterprise Value (MM)$70.5B
Shares Outstanding319.73M
Total Debt (MM)$5.21B
Cash & Equivalents (MM)$4.59B
LTM Net Debt (MM)$617.95M
LTM Net Debt/EBITDA0.2x
Growth
TTM Rev. Growth7.7%
Last 3-Yr Rev. CAGR6.8%
Last 3-Yr EBITDA CAGR10.5%
Last 3-Yr EPS CAGR14.8%
Valuation
Street Target Price$204.70
LTM EV/Revenue3.1x
LTM EV/Gross Profit11.2x
LTM EV/EBIT26.0x
LTM EV/EBITDA21.9x
LTM P/E32.6x
LTM EV/FCF31.9x
LTM P/FCF31.6x
LTM P/TB4.5x
LTM P/B11.3x
Dividend Yield0.8%
Payout Ratio24.9%
Executive SummarySituation: Current price is $213.67 versus fair value $186.37 (-12.8% expected return), and valuation confidence is stable. Debate: Bull case depends on Q1 2026 Earnings Release Management has guided to a 7-8% comp, which would validate the re-acceleration narrative. Bear case centers on Moat Erosion via Competitive Disruption The biggest threat is a permanent impairment of pricing power if mainstream retailers successfully implement low-price strategies or if new low-cost digital competitors disrupt the off-price supply... Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
The bull case rests on the successful scaling of the dd's DISCOUNTS brand and the continued effectiveness of the branded strategy in ladies' apparel and cosmetics, which drove a 9% comp in Q4 2025. Additionally, the new $2.55B buyback program provides a significant floor for EPS growth.
Bear Case
The bear case centers on valuation and margin erosion. At 33.1x P/E, the stock is priced for perfection despite a negative incremental ROIC of -12.0% and persistent distribution center cost headwinds (+55-75 bps). Furthermore, insiders have sold 13.7M in stock over the last 12 months with zero purchases.
Key Catalysts
Near-Term (0-6 months)Impact: High
Q1 2026 Earnings Release Management has guided to a 7-8% comp, which would validate the re-acceleration narrative. A miss here would likely...
Mid-Term (6-18 months)Impact: Moderate
Tariff Mitigation Progress Continued evidence of merchandise margin improvement (which rose 10 bps in Q4) would signal that the company has...
Long-Term (18+ months)Impact: Moderate
Ross Stores is relevant for analysis now due to the recent CEO transition and the announcement of a massive new $2.55B buyback program, whic...
Primary Risks
Concern: Medium
Moat Erosion via Competitive Disruption The biggest threat is a permanent impairment of pricing power if mainstream retailers successfully i...
Concern: High
Margin Compression from Structural Cost Increases Permanent increases in labor, freight, or tariff costs could lead to the bear case scenari...
Concern: Medium
The stewardship verdict is adequate. While the capital allocation strategy is highly shareholder-friendly, the lack of insider buying and th...
Recent Activity
2026-03-04SEC Filing (8-K)
+8.03%Ross Stores reports Q4 and FY2025 results, announces $2.55B stock repurchase authorization and dividend increase
2025-11-21SEC Filing (8-K)
+8.41%Ross Stores reports third quarter 2025 earnings with $1.58 per share, raises full year outlook
2025-05-23SEC Filing (8-K)
-9.85%Ross Stores reports first quarter 2025 earnings with $1.47 per share, withdraws annual guidance due to tariff uncertainty
2025-04-09Market Movement
+7.96%Market/Sector Move +7.96%
2024-05-24SEC Filing (8-K)
+7.79%Ross Stores reports first quarter 2024 earnings with $1.46 per share, provides updated fiscal 2024 guidance
Valuation Table
9.8/10Decision Grade