Based on the provided data and recent market analysis, here's a concise evaluation of ROST's valuation:
Current Valuation Metrics
ROST is currently trading at a P/E of 22.06x, EV/EBITDA of 14.51x, and P/S of 2.19x, indicating moderate valuation levels compared to historical averages.
Recent Performance and Technical Analysis
The stock has significantly underperformed the broader market, gaining only 7.6% over the past 52 weeks compared to the S&P 500's 25.3% gain. Recent price action shows weakness, with shares crossing below the 200-day moving average.
Analyst Sentiment
Recent analyst actions suggest caution, with multiple downgrades in January 2025. Morgan Stanley, Wells Fargo, and Bernstein all downgraded ROST to Hold, citing concerns about maturing store base and lower-income consumer pressures.
Growth Prospects
EPS is expected to grow 11% year-over-year to $6.17 for FY2025, but analysts are concerned about gradual deterioration in the company's 10% EPS growth algorithm over coming years.
Conclusion
ROST appears moderately overvalued considering its underperformance, recent analyst downgrades, and growth concerns. The current valuation multiples don't fully account for the headwinds facing the company's growth trajectory.