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Ross Stores (ROST) Exceeds Market Returns: Some Facts to Consider

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In the latest close session, Ross Stores (ROST - Free Report) was up +1.11% at $156.99. This change outpaced the S&P 500's 0.4% gain on the day. Meanwhile, the Dow experienced a drop of 0.04%, and the technology-dominated Nasdaq saw an increase of 0.66%.

Coming into today, shares of the discount retailer had gained 6.02% in the past month. In that same time, the Retail-Wholesale sector lost 3.61%, while the S&P 500 gained 1.02%.

The investment community will be paying close attention to the earnings performance of Ross Stores in its upcoming release. In that report, analysts expect Ross Stores to post earnings of $1.38 per share. This would mark a year-over-year decline of 6.76%. At the same time, our most recent consensus estimate is projecting a revenue of $5.39 billion, reflecting a 6.24% rise from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $6.19 per share and revenue of $22.12 billion, indicating changes of -2.06% and +4.71%, respectively, compared to the previous year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Ross Stores. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.04% lower. Ross Stores is holding a Zacks Rank of #3 (Hold) right now.

From a valuation perspective, Ross Stores is currently exchanging hands at a Forward P/E ratio of 25.1. This indicates a premium in contrast to its industry's Forward P/E of 23.36.

We can also see that ROST currently has a PEG ratio of 2.98. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Retail - Discount Stores industry had an average PEG ratio of 2.59 as trading concluded yesterday.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 26, putting it in the top 11% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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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