A strong stock as of late has been Ross Stores (ROST). Shares have been marching higher, with the stock up 4.1% over the past month. The stock hit a new 52-week high of $236.29 in the previous session. Ross Stores has gained 30.3% since the start of the year compared to the 4.3% move for the Zacks Retail-Wholesale sector and the 12.5% return for the Zacks Retail - Discount Stores industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 21, 2026, Ross Stores reported EPS of $2.02 versus consensus estimate of $1.7.
For the current fiscal year, Ross Stores is expected to post earnings of $7.64 per share on $24.61 in revenues. This represents a 15.58% change in EPS on a 8.19% change in revenues. For the next fiscal year, the company is expected to earn $8.37 per share on $26.03 in revenues. This represents a year-over-year change of 9.66% and 5.77%, respectively.
Valuation Metrics
Though Ross Stores has recently hit a 52-week high, what is next for Ross Stores? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Ross Stores has a Value Score of D. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 30.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 28.9X. On a trailing cash flow basis, the stock currently trades at 28.6X versus its peer group's average of 20.7X. Additionally, the stock has a PEG ratio of 2.67. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Ross Stores currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Ross Stores meets the list of requirements. Thus, it seems as though Ross Stores shares could have potential in the weeks and months to come.
How Does ROST Stack Up to the Competition?
Shares of ROST have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Burlington Stores, Inc. (BURL). BURL has a Zacks Rank of #2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of D.
Earnings were strong last quarter. Burlington Stores, Inc. beat our consensus estimate by 4.04%, and for the current fiscal year, BURL is expected to post earnings of $11.30 per share on revenue of $12.71 billion.
Shares of Burlington Stores, Inc. have gained 1.6% over the past month, and currently trade at a forward P/E of 28.89X and a P/CF of 19.64X.
The Retail - Discount Stores industry is in the top 25% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ROST and BURL, even beyond their own solid fundamental situation.
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This article originally published on Zacks Investment Research (zacks.com).