ROST
Ross Stores, Inc.
$234.11
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 113.8% above fair value
You pay
$234.11
Bear
$89.31
Fair
$109.49
Bull
$127.71
Bear
$89.31
-61.9%
4% stage 1 growth, 11% discount
Fair
$109.49
-53.2%
7% stage 1 growth, 11% discount
Bull
$127.71
-45.4%
9% stage 1 growth, 11% discount
Adjust Assumptions
6.8%
11.0%
3.0%
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
36.0x
Market is pricing in (growth)
16.8%
vs 6.8% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (47 analysts)
$279.53
Divergence from AlphaVal
61%
Summary
Using a two-stage FCF DCF with 7% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $109.49 per share.
Warnings
Wall Street's average price target is $279.53 (from 47 analysts). Our estimate is 61% 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