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Why Ross Stores (ROST) Dipped More Than Broader Market Today

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The most recent trading session ended with Ross Stores (ROST - Free Report) standing at $145.75, reflecting a -1.05% shift from the previouse trading day's closing. This change lagged the S&P 500's daily loss of 0.05%. Elsewhere, the Dow lost 0.02%, while the tech-heavy Nasdaq added 0.18%.

The discount retailer's stock has dropped by 1.79% in the past month, falling short of the Retail-Wholesale sector's gain of 1.71% and the S&P 500's gain of 2.76%.

The investment community will be paying close attention to the earnings performance of Ross Stores in its upcoming release. The company is predicted to post an EPS of $1.41, indicating a 6.02% growth compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $5.17 billion, up 5.01% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $6.20 per share and revenue of $21.27 billion, indicating changes of +11.51% and +4.39%, respectively, compared to the previous year.

Investors might also notice recent changes to analyst estimates for Ross Stores. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Ross Stores presently features a Zacks Rank of #2 (Buy).

Looking at its valuation, Ross Stores is holding a Forward P/E ratio of 23.76. For comparison, its industry has an average Forward P/E of 20.56, which means Ross Stores is trading at a premium to the group.

Investors should also note that ROST has a PEG ratio of 2.39 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Retail - Discount Stores was holding an average PEG ratio of 2.39 at yesterday's closing price.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 100, which puts it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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