ANALYST REPORT OF ROSS Stores, Inc.

Abstract

The report on Ross Stores, Inc. recommends a "Sell" position due to its overvalued share price despite its relative undervaluation in the market. Ross operates in the off-price retail sector, targeting middle- and moderate-income households through its Ross Dress for Less and dd's DISCOUNTS stores, offering substantial discounts. Financial analysis indicates stable profitability with high return on equity (ROE) and a healthy liquidity profile, although margins have not reached pre-2019 levels. The company maintains solid credit ratings, with a low probability of bankruptcy.

Although the valuation models suggest future growth, the absolute valuation highlights a notable discrepancy between the intrinsic value ($108.01) and the market price ($150.61), indicating overvaluation. Relative to competitors like TJX and Burlington, Ross has lower forward P/E, signifying attractiveness on a comparative basis. However, strategic expansion limitations, weak e-commerce presence, and market risks urge caution for investors seeking entry, while current shareholders are advised to capitalize on high market prices.