WEBULL
WebtradeDownload

Ross Stores (ROST) Nears Earnings, Is The Upside Already Priced In?

Simply Wall St · 1d ago

Ross Stores (ROST) is in focus after expectations for its upcoming second quarter fiscal 2026 earnings report pointed to year over year gains in revenue and earnings, with potential implications for near term stock moves.

See our latest analysis for Ross Stores.

Ross Stores’ share price has climbed from recent levels to close at US$245.36, with a 30 day share price return of 8.66% and year to date gain of 34.27%, alongside a 1 year total shareholder return of 68.49% that points to strong momentum over both shorter and longer horizons.

If Ross Stores’ recent run has you thinking about where else momentum could build next, this is a good moment to check out 20 top founder-led companies

After such a strong share price move, Ross Stores now sits only about 4% below the average analyst target, yet screens at a large premium to some intrinsic value estimates. Is the market being cautious enough or too cautious?

Most Popular Narrative: 229% Overvalued

According to a widely followed narrative from Esteban, the fair value for Ross Stores sits at $74.69, far below the recent $245.36 share price. That gap sets up a very different picture from the current market mood.

2,282-store US off-price retailer that converts other people's inventory mistakes into an 18% return on invested capital, and it does so most reliably when the economy is worst, recessions simultaneously push shoppers toward value and flood the closeout market with distressed branded goods, which is why the business generated record free cash flow in the COVID year on collapsed earnings. The investment case is not growth, it is protected compounding at a modest rate.

Read the complete narrative.

Want to see why Esteban thinks Ross Stores’ fair value sits so far below today’s price? The narrative leans heavily on long run cash generation, unit expansion and margin shape. The exact mix of revenue growth, free cash flow growth and profitability tells a very specific story about what this stock might be worth on a decade long view.

Result: Fair Value of $74.69 (OVERVALUED)

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

However, Ross Stores could face pressure if off price competitors gain more buying power, or if the availability of attractive closeout inventory tightens.

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

Next Steps

With such a mixed sentiment around Ross Stores, it helps to stress test the thesis against the numbers yourself and move quickly while the narrative is still forming. To see what is driving optimism on the reward side, start by reviewing the 2 key rewards.

Looking for more Ross Stores investment ideas?

If you are weighing what Ross Stores means for your portfolio, this is the moment to broaden your watchlist and compare it with other targeted stock ideas.

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.