Yahoo Finance Ross Stores Inc (NASDAQ:ROST): Will The Growth Last?
As Ross Stores Inc (NASDAQ:ROST) announced its earnings release on 04 August 2018, analyst consensus outlook appear cautiously subdued, with profits predicted to rise by 3.9% next year compared with the higher past 5-year average growth rate of 11.1%. Presently, with latest-twelve-month earnings at US$1.53b, we should see this growing to US$1.59b by 2019. Below is a brief commentary around Ross Stores’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
View our latest analysis for Ross Stores
How is Ross Stores going to perform in the near future?
The 24 analysts covering ROST view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of ROST’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of US$1.36b and the final forecast of US$1.72b by 2021, the annual rate of growth for ROST’s earnings is 8.7%. This leads to an EPS of $5.42 in the final year of projections relative to the current EPS of $3.58. Growth in the bottom line seems to suggest reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. Margins is currently sitting at 9.6%, which is expected to expand to 10.2% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Ross Stores, I’ve put together three relevant aspects you should further examine:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is Ross Stores worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Ross Stores is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Ross Stores? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
