你应该调查纳斯达克公司(ROST：ROST)71.38亿美元的价格吗？

Today we're going to take a look at the well-established Ross Stores, Inc. (NASDAQ:ROST). The company's stock received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$108 at one point, and dropping to the lows of US$70.23. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Ross Stores' current trading price of US$71.38 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Ross Stores's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Ross Stores

Is Ross Stores still cheap?

According to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average, the stock currently looks expensive. In this instance, I've used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock's cash flows. I find that Ross Stores's ratio of 15.76x is above its peer average of 5.78x, which suggests the stock is trading at a higher price compared to the Specialty Retail industry. In addition to this, it seems like Ross Stores's share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will Ross Stores generate?

Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 25% over the next couple of years, the future seems bright for Ross Stores. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? ROST's optimistic future growth appears to have been factored into the current share price, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe ROST should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you've been keeping tabs on ROST for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for ROST, which means it's worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Ross Stores as a business, it's important to be aware of any risks it's facing. Be aware that Ross Stores is showing 4 warning signs in our investment analysis and 1 of those makes us a bit uncomfortable...

If you are no longer interested in Ross Stores, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.