Ross Stores bounces off of its 50-day moving average
Retailer Ross Stores (Nasdaq: ROST) saw its stock double in value from mid-2017 through the middle of this year. Sure there were some up and down cycles along the way, but the overall trend in the stock has been to upside for over two years.
Looking at the daily chart we see how the stock has been trending higher since the end of May and has been riding its 50-day moving average higher over the last four months. The recent pullback got my attention as the 50-day acting as support coincided with bullish crossover by the stochastic readings. The indicators were in oversold territory and turned higher over the last few days. We saw a similar pattern in the chart back in August when the stock was trading in the $102 range and then went on to rally up to $114.
From a fundamental perspective, Ross Stores has been doing pretty well. The company has seen its earnings grow by 18% per year over the last three years while sales have grown by a rate of 8% per year. The company boasts a return on equity of 47% and a profit margin of 13.7%.
The one area of concern from Tickeron's Fundamental Analysis Overview is the Valuation Rating. Ross gets a rating of 87 and that indicates that the company is significantly overvalued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization.
All the other fundamental ratings are either better than average or average at worse. The Profit vs. Risk Rating is 14, indicating low risk on high returns. The average Profit vs. Risk Rating for the industry is 89, placing this stock much better than average.
The Tickeron SMR rating for this company is 32n and that indicates very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents.
The PE Growth Rating for Ross is 42, pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents. A rating of 1 indicates highest PE growth while a rating of 100 indicates lowest PE growth.
Turning our attention to the sentiment toward Ross, there is a certain degree of skepticism being aimed at the stock. There are 23 analysts covering the stock with 13 "buy" ratings, eight "hold" ratings, and two "sell" ratings. This puts the buy percentage at 56.5% and that is below average.
The short interest ratio is at 2.62 and that is slightly lower than average, but it has increased in the last few months. The ratio was at 1.85 at the end of August, so the ratio is trending higher.
Ross Stores is scheduled to release earnings later this month and analysts expect the company to report earnings per share (EPS) of $0.97 for the quarter and that is up from $0.91 from last year. The report is scheduled for November 21 and it is set for release after the closing bell.
ROST in downward trend: price dove below 50-day moving average on April 02, 2024
ROST moved below its 50-day moving average on April 02, 2024 date and that indicates a change from an upward trend to a downward trend. In of 46 similar past instances, the stock price decreased further within the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on April 01, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on ROST as a result. In of 94 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The 10-day moving average for ROST crossed bearishly below the 50-day moving average on April 04, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 17 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ROST declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for ROST entered a downward trend on April 23, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator entered the oversold zone -- be on the watch for ROST's price rising or consolidating in the future. That's also the time to consider buying the stock or exploring call options.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 14 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where ROST advanced for three days, in of 348 cases, the price rose further within the following month. The odds of a continued upward trend are .
ROST may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 77, placing this stock slightly better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. ROST’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: ROST's P/B Ratio (10.020) is slightly higher than the industry average of (3.862). P/E Ratio (26.088) is within average values for comparable stocks, (100.955). ROST's Projected Growth (PEG Ratio) (2.444) is slightly higher than the industry average of (1.444). Dividend Yield (0.009) settles around the average of (0.027) among similar stocks. P/S Ratio (2.402) is also within normal values, averaging (2.003).
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
an operator of discount clothing chains & sells closeout merchandise
Industry ApparelFootwearRetail