Discount retailer Ross Stores (ROST Quick QuoteROST - Free Report) is set to report Q2 results Thursday after the closing bell. Ross Stores, a Zacks Rank #3 (Hold), has missed earnings estimates just once in the past four quarters. With analyst estimates coming down recently, is this off-price retailer a buy heading into the earnings announcement?

Shares of ROST have fallen about 19% since the beginning of the year. Analysts are expecting the company to post quarterly EPS of $0.99 per share, which would translate to negative growth of -28.8% versus the same quarter last year. Ross Stores boasts a trailing four-quarter average earnings surprise of 20.5%. Analyst estimates have declined -4.8% in the past 60 days.

ROST is part of the Zacks Retail – Discount Stores industry, which ranks in the top 22% out of approximately 250 industry groups. Yet the off-price retailer is still overvalued relative to its industry group. More weakness may lie ahead if the company fails to impress on its quarterly results.