ROSS STORES, INC. (ROST) Stock Analysis
ROSS STORES, INC. (ROST) Stock Analysis
Analysis from 10-Q filed 2025-12-10. Data as of Q4 2025.
Overall Grade: F (Concerning)
ROSS STORES, INC. faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 20.1% | Above industry average |
| FCF Margin | 8.9% | Healthy cash flow |
| Debt/Equity | 0.3x | Conservative leverage |
Investment Thesis: Strong return on invested capital of 20.1% suggests durable competitive advantages and efficient capital allocation.
Explore ROSS STORES, INC.: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: ROSS STORES, INC. earns 20.1% ROIC, Top 25% in Consumer Discretionary
ROSS STORES, INC.'s trailing-twelve-month ROIC of 20.1% ranks Top 25% in Consumer Discretionary companies (sector median: 8.8%), driven by NOPAT margin of 9.0% combined with asset turnover of 1.5x. Source: 10-Q filed 2025-12-10. Gross margin of 27.5% with operating margin at 11.9% reflects a competitive pricing environment.
| Metric | ROST | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 20.1% | Excellent | Above sector median of 8.8% |
| Return on Equity (ROE) | 37.3% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 27.5% | Adequate | Competitive pricing environment |
| Operating Margin | 11.9% | Good | Moderate operational efficiency |
Cash Flow: ROSS STORES, INC. generates $2.0B FCF at 8.9% margin, positive NaN/8 quarters
ROSS STORES, INC. generated $2.0B in free cash flow (TTM), a 8.9% FCF margin, a margin that ranks Top 25% in Consumer Discretionary. Operating cash flow exceeds net income by 1.3x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-12-10.
| Metric | ROST | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 8.9% | Adequate | Healthy cash generation |
| Free Cash Flow (TTM) | $2.0B | Good | Positive cash generation |
| OCF/Net Income | 1.3x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: ROSS STORES, INC. at 0.3x leverage
ROSS STORES, INC.'s debt-to-equity ratio of 0.3x reflects conservative leverage. Net cash position of $2.6B provides financial flexibility. Source: 10-Q filed 2025-12-10.
| Metric | ROST | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.3x | Excellent | Conservative capital structure |
| Net Cash Position | $2.6B | Excellent | Net cash positive |
Valuation: ROSS STORES, INC. trades at 24.7x earnings
ROSS STORES, INC. trades at a P/E of 24.7x. Free cash flow yield of 3.8% reflects market expectations for growth.
| Metric | ROST | Rating | Context |
|---|---|---|---|
| P/E Ratio | 24.7x | Adequate | Premium valuation |
| EV/Sales | 2.0x | Good | Attractive revenue multiple |
| FCF Yield | 3.8% | Adequate | Lower cash yield |
| Dividend Yield | 1.0% | Adequate | Growth focus over income |
Capital Allocation: ROSS STORES, INC. returns 3.0% shareholder yield
ROSS STORES, INC.'s total shareholder yield is 3.0% (dividends 1.0% + buybacks 2.0%). Source: 10-Q filed 2025-12-10.
| Metric | ROST | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 3.0% | Good | Dividend + buyback yield combined |
| Buyback Yield | 2.0% | Adequate | Active share repurchases |
| Total Capital Returned (TTM) | $1.6B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 20.1% | Top 25% | 2.3x above |
| Free Cash Flow Margin | 8.9% | Top 25% | 3.3x above |
| Gross Margin | 27.5% | Bottom 50% | 0.7x below |
| Operating Margin | 11.9% | Top 25% | 2.5x above |
| Return on Equity (ROE) | 37.3% | Top 25% | 3.5x above |
| P/E Ratio | 24.7x | N/A | - |
Financial Scorecard
| Metric | ROST | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 20.1% | Excellent | Top 25% of sector (median: 8.8%) |
| Free Cash Flow Margin | 8.9% | Adequate | Top 25% of sector (median: 2.7%) |
| Gross Margin | 27.5% | Adequate | Bottom 50% of sector (median: 39.5%) |
| Debt to Equity Ratio | 25.8% | Excellent | Conservative capital structure |
| P/E Ratio (Price-to-Earnings) | 24.7x | Adequate | Fair value |
| Free Cash Flow Yield | 3.8% | Adequate | Moderate yield |
Frequently Asked Questions
Q: What is ROSS STORES, INC.'s Return on Invested Capital (ROIC)?
ROSS STORES, INC. (ROST) has a trailing twelve-month Return on Invested Capital (ROIC) of 20.1%. This compares above the sector median of 8.8%. An ROIC above 20% indicates exceptional capital efficiency and strong competitive advantages.
Q: What is ROSS STORES, INC.'s Free Cash Flow Margin?
ROSS STORES, INC. (ROST) has a free cash flow margin of 8.9%, generating $2.0 billion in free cash flow over the trailing twelve months. A FCF margin between 5-10% is typical for capital-intensive businesses.
Q: Is ROSS STORES, INC. stock overvalued or undervalued?
ROSS STORES, INC. (ROST) trades at a P/E ratio of 24.7x, which is above the sector median of N/A. The EV/Sales multiple is 2.0x. Free cash flow yield is 3.8%, which is in line with market averages.
Q: Does ROSS STORES, INC. pay a dividend?
ROSS STORES, INC. (ROST) currently pays a dividend yield of 1.0%. Including share buybacks, the total shareholder yield is 3.0%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: What is ROSS STORES, INC.'s revenue and earnings growth?
ROSS STORES, INC. (ROST) grew revenue by 3.7% year-over-year. Earnings per share increased by 0.8% compared to the prior year. Modest growth indicates a mature business with stable demand.
Q: Is ROSS STORES, INC. buying back stock?
ROSS STORES, INC. (ROST) repurchased $1.1 billion of stock over the trailing twelve months. This represents a buyback yield of 2.0%.
Q: How does ROSS STORES, INC. compare to competitors in Consumer Discretionary?
Compared to other companies in Consumer Discretionary, ROSS STORES, INC. (ROST) shows: ROIC of 20.1% is above the sector median of 8.8% (Top 18%). FCF margin of 8.9% exceeds the sector median of 2.7% (Top 18% of sector). Gross margin at 27.5% is 12 percentage points lower than sector peers. These rankings are based on MetricDuck's analysis of all Consumer Discretionary companies with available SEC filings.
Q: What warning signs should I watch for with ROSS STORES, INC.?
Investors in ROSS STORES, INC. (ROST) should monitor these potential warning signs: 1) ROIC has been declining, potentially signaling deteriorating competitive position. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-12-10. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.