Ross Stores, Inc. (ROST) receives a weak valuation score of 9 from InvestorsObserver's analysis. Our proprietary scoring system considers the overall health of the company by looking at the stock's price, earnings, and growth rate to determine if it represents a good value. ROST holds a better value than 9% of stocks at its current price. Investors who are focused on long-term growth through buy-and-hold investing will find the Valuation Rank especially relevant when allocating their assets.
ROST has a trailing twelve month Price to Earnings (PE) ratio of 69.5. The historical average of roughly 15 shows a poor value for ROST stock as investors are paying higher share prices relative to the company's earnings. ROST's high trailing PE ratio shows that the firm has been trading above its fair market value recently. Its trailing 12-month earnings per share (EPS) of 1.50 does not justify the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings.
ROST has a 12 month forward PE to Growth (PEG) ratio of 8.53. Markets are undervaluing ROST in relation to its projected growth as its PEG ratio is currently below the fair market value of 1. 1.5's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.
ROST' has a weak valuation at its current share price on account of a overvalued PEG ratio due to strong growth. ROST's PE and PEG are worse than the market average leading to a below average valuation score.