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Ross Stores - AI Stock Analysis

Analysis generated November 21, 2024

Ross Stores, Inc. operates Ross Dress for Less® (“Ross”), the largest off-price apparel and home fashion chain in the United States. The company also operates dd’s DISCOUNTS®, which features a more moderately-priced assortment of first-quality, in-season, name brand apparel, accessories, footwear, and home fashions. Ross Stores offers a treasure-hunt shopping experience with significant savings compared to regular department and specialty stores. Ross Stores serves various customer segments, including value-focused customers looking for high-quality merchandise at lower prices.

Fundamental Analysis

The revenue for Ross Stores in the last quarter was $5.33 billion, an 8.70% increase from the previous quarter and a 7.22% increase year-over-year. This growth in revenue indicates a healthy demand for their products and adept management of their business model.

The net income for Ross Stores in the last quarter was $527 million, an 8.02% increase from the previous quarter and an 18.11% increase year-over-year. Net income growth outpacing revenue growth highlights effective cost management and operational efficiency.

EBITDA for the last quarter stood at $768 million, a 9.64% increase from the previous quarter and a 17.01% increase year-over-year. This strong EBITDA growth underscores Ross Stores' operational health and capacity to generate earnings before accounting for interest, taxes, depreciation, and amortization.

Currently, the P/E ratio of Ross Stores is 22.46, indicating the stock is reasonably valued within its sector, neither particularly high nor low. However, insider selling, noted in recent months, could be a bearish signal possibly suggesting some lack of confidence within the company’s leadership regarding future stock prices.

Technical Analysis

As of today, Ross Stores' stock price is $142.02, exhibiting a short-term decrease of 3.58% over the past month. However, the stock has increased by 9.52% over the past year, indicating a favorable long-term trend.

The current trend is bearish, with the 10-day Simple Moving Average (SMA10) now at 140.71, slightly down from the previous SMA10 of 140.74. This suggests a potential downward trend in price movement. The Relative Strength Index (RSI) is at 63.9, which signals a neutral condition, indicating no clear overbought or oversold status.

Alternative Data Analysis

Considering job postings and employee sentiment, Ross Stores has 6,194 open positions, stable over recent months. This indicates a steady, if not growing, workforce. However, only 45% of employees reportedly have a positive outlook on the business, which is a concerning sign and could reflect internal challenges or future uncertainty.

Customer acquisition data shows Ross Stores' website has received 1.9 million visitors, a 10% increase over the past couple of months. This bullish trend can indicate a potential rise in customer interest and future sales.

Customer engagement metrics reveal Ross Stores has 590,000 followers on Instagram and 3,700 followers on Twitter, with no significant changes recently. Stable social media following can reflect a consistent brand presence and engagement.

AltIndex’s AI score, incorporating fundamental, technical, and alternative data, assigns Ross Stores a score of 45. This indicates a hold signal, suggesting neutrality in terms of the stock's future performance.

Conclusion and Recommendation

Ross Stores appears to be in a stable financial position with strong quarterly and annual growth in revenue, net income, and EBITDA. The P/E ratio falling within a normal range does not signal immediate overvaluation concerns. However, insider selling and low employee sentiment could be potential red flags.

From a technical standpoint, the short-term downward price movement and a bearish trend warrant caution, even though the long-term trend remains positive. The neutral RSI also fails to provide a clear market sentiment indicator.

Alternative data presents a mixed picture: stable job postings coupled with low employee morale, increasing customer website traffic tempered by static social media engagement.

Based on a comprehensive analysis of fundamental, technical, and alternative data, along with the AI prediction score indicating a hold, the best course of action is to adopt a neutral stance on Ross Stores, monitoring future developments closely before making any trading decisions.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.