Shares of Ross Stores (ROST) have been strong performers lately, with the stock up 5.5% over the past month. The stock hit a new 52-week high of $224.6 in the previous session. Ross Stores has gained 24.6% since the start of the year compared to the -1.9% gain for the Zacks Retail-Wholesale sector and the 14.8% return for the Zacks Retail - Discount Stores industry.
What's Driving the Outperformance?
The stock has an impressive 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 March 3, 2026, Ross Stores reported EPS of $2 versus consensus estimate of $1.88.
For the current fiscal year, Ross Stores is expected to post earnings of $7.28 per share on $24.19 in revenues. This represents a 10.14% change in EPS on a 6.34% change in revenues. For the next fiscal year, the company is expected to earn $7.99 per share on $25.64 in revenues. This represents a year-over-year change of 9.76% and 6%, 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. The idea behind the style scores is to help investors 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 B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 30.9X current fiscal year EPS estimates, which is a premium to the peer industry average of 29.7X. On a trailing cash flow basis, the stock currently trades at 27.4X versus its peer group's average of 20.3X. Additionally, the stock has a PEG ratio of 3.08. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Ross Stores currently has a Zacks Rank of #2 (Buy) thanks to a solid earnings estimate revision trend.
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 passes the test. Thus, it seems as though Ross Stores shares could still be poised for more gains ahead.
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Ross Stores, Inc. (ROST): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).