Apparel - Retail · NASDAQ
Current Price
$225.08
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Ross Stores, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd's DISCOUNTS brand names. Its stores primarily offer apparel, accessories, footwear, and home fashions. The company's Ross Dress for Less stores sell its products at department and specialty stores primarily to middle income households; and dd's DISCOUNTS stores sell its products at department and discount stores for households with moderate income. As of July 5, 2022, it operated approximately 1,950 stores under the Ross Dress for Less and dd's DISCOUNTS name in 40 states, the District of Columbia, and Guam. Ross Stores, Inc. was incorporated in 1957 and is headquartered in Dublin, California.
ROIC (TTM)
17.1%
ROE (TTM)
36.7%
FCF Yield
3.03%
Based on trailing twelve-month data, ROST shows a free cash flow per share of N/A and a ROIC of 17.1%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 3.03% are important context metrics when evaluating ROST's stock valuation relative to peers.
The intrinsic value of ROST depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether ROST is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $225.08. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Ross Stores, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Apparel - Retail industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting ROST's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Ross Stores, Inc., this means projecting how much free cash flow the Apparel - Retail will produce over the next 5-10 years, then discounting those amounts to today's dollars. ROST's ROIC of 17.1% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For ROST, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
