In May 2019, Ross Stores, Inc. (NASDAQ:ROST) announced its earnings update. Overall, it seems that analyst expectations are fairly bearish, with earnings expected to grow by 4.2% in the upcoming year against the higher past 5-year average growth rate of 13%. Presently, with latest-twelve-month earnings at US$1.6b, we should see this growing to US$1.7b by 2020. Below is a brief commentary on the longer term outlook the market has for Ross Stores. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
What can we expect from Ross Stores in the longer term?
The 23 analysts covering ROST view its longer term outlook with a positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of ROST's earnings growth over these next few years.
By 2022, ROST's earnings should reach US$2.0b, from current levels of US$1.6b, resulting in an annual growth rate of 9.3%. EPS reaches $5.81 in the final year of forecast compared to the current $4.3 EPS today. In 2022, ROST's profit margin will have expanded from 11% to 11%.
Future outlook is only one aspect when you're building an investment case for a stock. For Ross Stores, I've compiled three key 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!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.