ROST
Ross Stores, Inc.
$234.81
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 58.2% above fair value
You pay
$234.81
Bear
$121.06
Fair
$148.43
Bull
$173.14
Bear
$121.06
-48.4%
4% stage 1 growth, 11% discount
Fair
$148.43
-36.8%
7% stage 1 growth, 11% discount
Bull
$173.14
-26.3%
9% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
36.9x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $244.45 from 47 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $148.43 per share.
Warnings
Wall Street's average price target is $244.45 (from 47 analysts). Our estimate is 56% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions