Key Stats for Ross Stores Stock
- Past week’s performance: +0.3%
- 52-week range: $122.36 to $194.92
- Valuation model target price: $279.60
- Implied upside: 46.6% over 1.9 years
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What Happened?
Shares of off-price retailer Ross Stores (ROST) were little changed this week, and the stock closed near $190.74. The stock trades close to its all-time high of $194.92, so some investors locked in gains, but support held firm.
No major company-specific news broke this week. Yet the stock benefits from solid holiday trends reported earlier and ongoing store expansion.
Consumer demand stays resilient, and the off-price model attracts bargain hunters across income levels. The quiet week shows consolidation near highs rather than any fundamental shift.
Business execution remains central. Store openings drive growth because Ross profitably adds locations in underserved markets. Comparable store sales signal strength, since they reflect how well discounted apparel and home goods resonate.
Margins rely on smart buying and cost control, and scale delivers quick leverage in this lean model. Buybacks support per-share growth because they reduce shares outstanding at attractive valuations.
If these elements align, the stock’s price embeds near-term caution but offers long-term compounding potential.
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Is Ross Stores Stock Undervalued?
Under the valuation model assumptions realized through 2028, the stock is modeled using:
- Revenue growth (CAGR): 3.5%
- Operating margins: 8.0%
- Exit P/E multiple: 18.0x
Based on these inputs, the model estimates a target price of $279.60, implying a 46.6% total return from the current share price of $190.74 and an annualized return of 22.3% over the next 1.9 years.
Ross Stores’ performance hinges on store expansion, because new units provide most incremental revenue in a mature market.
Comparable sales growth matters, since it shows sustained appeal to value-conscious shoppers. Margin execution drives profitability, and disciplined inventory and expenses enable operating leverage.
Capital returns add value because consistent buybacks boost earnings per share over time. If these drivers continue, Ross Stores can deliver steady compounding, and the model suggests attractive risk-adjusted returns from current levels.
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