Ross Stores, Inc. (ROST) Stock Valuation — PE Analysis
Apparel - Retail · NASDAQ
Current Price
$230.09
PE Ratio (TTM)
27.6x
Intrinsic Value
$235.6
+2.3% margin of safety
COMPETITIVE MOAT
↑Scale and Bargaining Power
Ross Stores' vast network of over 2,300 locations provides significant purchasing power. This allows them to negotiate favorable terms with suppliers, securing lower costs for merchandise.
↑Off-Price Business Model Efficiency
Their off-price model thrives on opportunistic buying and rapid inventory turnover. This agility in sourcing and selling unique, discounted items creates a distinct value proposition for consumers.
↑Customer Loyalty to Value
Consumers actively seek out Ross for its consistent offering of branded merchandise at lower prices. This ingrained habit creates a loyal customer base driven by perceived value.
INVESTMENT RISKS
↓Economic Sensitivity
As an off-price retailer, Ross's performance is closely tied to consumer spending power. Economic downturns or rising inflation could reduce discretionary income, impacting sales.
↓Inventory Management Challenges
The off-price model relies on effectively managing a constantly changing inventory. Poor buying decisions or an inability to move merchandise quickly can lead to markdowns and reduced profitability.
↓Brand Dilution Concerns
While offering branded goods, the off-price environment could potentially dilute the perceived exclusivity or desirability of certain brands over time.
Base case
ROST base case PE valuation
A base case PE valuation for ROST estimates a fair value of about $235.6 per share, against a current price of $230.09. The model assumes 6.7% annual earnings growth, a 27.56x target PE multiple, and a 10% discount rate.
Intrinsic Value
$235.6
Margin of safety
+2.3%
Expected annual return
+0.5%
Base case assumptions: 6.7% annual earnings growth, 27.56x target PE, 10% discount rate, 5 year projection. Data as of 2026-10-27.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ROST PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Ross Stores, Inc. respond.
Open PE Calculator for ROSTCompany Overview
Ross Stores, Inc., through its various subsidiaries, manages a chain of off-price retail establishments focusing on apparel and home goods. These stores operate under two main brand names: Ross Dress for Less and dd's DISCOUNTS. Their product selection primarily includes clothing, accessories, footwear, and household decor. The Ross Dress for Less outlets primarily serve middle-income households, offering merchandise at prices considerably lower than traditional department and specialty stores. Conversely, dd's DISCOUNTS stores cater to moderate-income households, providing products at prices below those typically found in department and discount stores. As of July 5, 2022, the company had approximately 1,950 stores operating across 40 states, the District of Columbia, and Guam. Ross Stores, Inc. was founded in 1957 and is based in Dublin, California.
Financial Metrics — ROST PE Stock Valuation Data
PE Ratio (TTM)
27.6x
PEG Ratio
0.87
Earnings Yield
3.63%
ROE (TTM)
42.3%
Revenue/Share (TTM)
$77.00
Dividend Yield
0.76%
Debt/Equity
0.70x
Frequently Asked Questions
What is the PE ratio of ROST?
The trailing twelve-month PE ratio of ROST reflects how much investors pay per dollar of Ross Stores, Inc.'s earnings. This metric is most useful when compared to Apparel - Retail peers and the company's own historical range.
Is ROST overvalued based on PE ratio?
ROST's PE of 27.6x combined with a PEG ratio of 0.87 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Apparel - Retail, a DCF analysis may be more appropriate.
How do I value ROST stock using PE ratio?
To value Ross Stores, Inc. using PE: (1) Compare the current PE (27.6x) against the Apparel - Retail median to assess relative pricing, (2) check the PEG ratio (0.87) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of ROST?
ROST's PEG ratio is 0.87, calculated by dividing the PE ratio (27.6x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for ROST stock valuation?
PE ratio gives a quick relative read — how ROST is priced versus Apparel - Retail peers. DCF provides an absolute value based on projected free cash flows. For ROST, with a strong ROE of 42.3%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See ROST DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Consumer Cyclical valuationsP/E and DCF value ROST with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-10-27. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.