Assessing Ross Stores (ROST) Valuation After Recent Share Price Strength

Ross Stores (ROST) shares have been showing steady resilience lately, with the stock posting a 6% gain in the past month and outperforming broader retail peers. Investors seem increasingly attentive to the company’s consistent earnings growth over the last year.

See our latest analysis for Ross Stores.

Ross Stores' solid momentum is drawing attention, with a 1-month share price return of nearly 7% adding to confidence after a 14% total shareholder return over the past year. Investors appear increasingly optimistic, as recent gains build on steady long-term outperformance.

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But after such a strong run, is Ross Stores still undervalued, or is the market already factoring in further growth? Could there be a real buying opportunity, or is future success already reflected in the current price?

Most Popular Narrative: 2.6% Undervalued

The latest narrative sees Ross Stores trading just slightly below its fair value, with consensus estimates offering a modest premium to the recent close. The reasoning behind this target hinges on a mix of strategic expansion moves and the ability to capture value-driven consumer demand.

Strategic expansion and operational investments position Ross to capture growth as consumers seek value in uncertain economic times. Improved merchandising and supply chain initiatives support strong margins and reinforce the company's competitive advantage.

Read the complete narrative.

Curious why analysts are betting on this bullish price target? The headline number is powered by a unique blend of growth assumptions and profitability projections that defy typical retail expectations. The precise pathway to this valuation is more surprising than you might expect. Who’s backing up this number, and what dramatic shifts are on the horizon? Find out what’s driving the consensus premium.

Result: Fair Value of $164.59 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent inflation and Ross's lack of a strong digital presence could challenge margin growth and may potentially shift the valuation narrative ahead.

Find out about the key risks to this Ross Stores narrative.

Another View: Looking Through the Lens of Market Ratios

While Ross Stores appears slightly undervalued based on our fair value estimate, its price-to-earnings ratio stands out at 25.3 times, which is much higher than the US Specialty Retail industry average of 16.4 and the fair ratio of 18.3. This steep premium could signal higher valuation risk if investor sentiment changes. Are the growth prospects strong enough to justify paying up, or is caution warranted?

Story Continues

See what the numbers say about this price — find out in our valuation breakdown.NasdaqGS:ROST PE Ratio as at Nov 2025

Build Your Own Ross Stores Narrative

If you see the story unfolding differently, or want to dive deeper into the numbers yourself, you can craft your own in just a few minutes. Do it your way

A great starting point for your Ross Stores research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ROST.

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