Ross Stores (ROST) Stock May Be Expensive On Its 130% 3 Year Run

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Ross Stores stock has delivered very strong returns in recent years, yet the valuation checks currently lean expensive rather than cheap. With the share price at US$251.08 and a rich recent run behind it, investors are weighing solid share price momentum against signals that the stock is not screening as a clear bargain.

Ross Stores has returned 129.9% over the last 3 years, which puts fresh focus on whether the current share price already reflects much of the good news. The company is expanding its physical footprint with 47 new stores opened in June and July 2026 and further openings planned, which can support long term growth expectations, while the capital required to keep rolling out new locations may limit how much valuation upside investors are comfortable assigning. On Simply Wall St's broader valuation checks, Ross Stores is assessed as undervalued in 0 of 6 areas, which suggests the stock currently leans expensive rather than offering clear value for new buyers 0/6.

The issue now is whether Ross Stores' current valuation leaves enough compensation for the risks and growth expectations that are already embedded in the price.

Ross Stores delivered 84.9% returns over the last year. See how this stacks up to the rest of the Specialty Retail industry.

Is Ross Stores Getting Expensive on Earnings?

The P/E ratio suits Ross Stores because earnings remain a core anchor for how investors look at large, established retailers. Ross Stores currently trades on a P/E of 34.8x, which is well above the Specialty Retail industry average of 20.2x and also higher than the peer group average of 26.9x.

The fair P/E ratio implied by Simply Wall St's model is 20.4x, which is materially below where Ross Stores is priced today. That gap suggests investors are paying a sizeable premium for the stock relative to what the model estimates based on factors such as growth, profitability and risk. Despite the recent store opening program in 2026 keeping Ross Stores in the headlines, the P/E multiple still sits at a clear premium to both industry norms and the modelled fair level.

On this P/E yardstick, Ross Stores stock currently screens as overvalued.NasdaqGS:ROST P/E Ratio as at Jul 2026

See what the numbers say about this price — find out in our valuation breakdown.

The Ross Stores Narrative: What Would Justify Today's Price?

Simply Wall St Narratives for Ross Stores aim to turn the valuation puzzle above into clear scenarios that explain what would need to happen with Ross Stores' future growth, margins and earnings for the stock to be worth significantly more or less than its current price, and they sit on the company's Community page. Rather than relying on a single multiple or model, each narrative sets out the key assumptions behind its view of fair value so you can compare them with the actual results as they are reported.

Story Continues

Community views on Ross Stores sit far apart, with some investors seeing a well defended compounder and others worried about overpaying for those qualities.

Bull case: roughly fairly valued

"Investments in supply chain infrastructure and operational initiatives (e.g., new distribution center, store refreshes, rollout of self-checkout) are establishing a foundation for greater operating leverage and cost discipline, which should benefit net margins as these investments scale…"

Read the full Bull Case to see why Ross Stores could be undervalued

Bear case: 236% overvalued

"The reason not to overpay for it is that Ross is the structurally smaller player in a business where buying scale is the moat itself, and it has been losing relative scale to TJX for a decade…"

Read the full Bear Case to see why Ross Stores could be overvalued

Do you think there's more to the story for Ross Stores? Head over to our Community to see what others are saying!

The Bottom Line

Ross Stores now trades on a clear premium P/E multiple relative to both its industry and the modelled fair ratio. For you as an investor, the key question is whether the underlying growth and margin story can keep justifying that premium, rather than expecting a quick re rating to cheaper levels. The crux of the debate is how much confidence you have that Ross Stores can keep compounding earnings strongly enough to offset any future pressure on that valuation.

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.

Companies discussed in this article include ROST.

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