Ross Stores, Inc. (ROST) Stock Valuation — PE Analysis
Apparel - Retail · NASDAQ
Current Price
$250.52
PE Ratio (TTM)
34.7x
Intrinsic Value
$285.97
+12.4% margin of safety
COMPETITIVE MOAT
↑Off-Price Merchandising Expertise
Ross Stores excels at sourcing branded merchandise at lower costs. This allows them to offer compelling value to price-sensitive consumers.
↑Efficient Supply Chain & Inventory Management
Their agile supply chain and inventory systems enable rapid product turnover. This minimizes markdowns and maximizes profitability on diverse assortments.
↑Store Network Scale and Location Strategy
A broad network of well-located stores provides broad consumer access. This scale creates a significant barrier to entry for new off-price competitors.
INVESTMENT RISKS
↓Economic Sensitivity and Discretionary Spending
As a retailer of discretionary goods, Ross is vulnerable to economic downturns. Reduced consumer confidence can significantly impact sales and profitability.
↓Inventory Risk and Obsolescence
The off-price model relies on opportunistic buying. Holding excess or outdated inventory can lead to significant markdowns and financial losses.
↓Dependence on Brand Partnerships
Ross's ability to secure desirable merchandise depends on relationships with brands. Any disruption in these partnerships could impact product availability and appeal.
Base case
ROST base case PE valuation
A base case PE valuation for ROST estimates a fair value of about $285.97 per share, against a current price of $250.52. The model assumes 9.6% annual earnings growth, a 35x target PE multiple, and a 10% discount rate.
Intrinsic Value
$285.97
Margin of safety
+12.4%
Expected annual return
+2.7%
Base case assumptions: 9.6% annual earnings growth, 35x target PE, 10% discount rate, 5 year projection. Data as of 2026-07-30.
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)
34.7x
PEG Ratio
2.57
Earnings Yield
2.90%
ROE (TTM)
38.4%
Revenue/Share (TTM)
$74.54
Dividend Yield
0.68%
Debt/Equity
0.75x
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 34.7x combined with a PEG ratio of 2.57 provides a growth-adjusted perspective. A PEG above 2.0 means the P/E is high 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 (34.7x) against the Apparel - Retail median to assess relative pricing, (2) check the PEG ratio (2.57) 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 2.57, calculated by dividing the PE ratio (34.7x) by the expected earnings growth rate. A PEG above 2.0 means the P/E is high 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 38.4%, 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 2026-07-30. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.