Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.
As of today (2024-04-16), the stock price of Ross Stores is $133.65. Ross Stores's graham number for the quarter that ended in Jan. 2024 was $42.64. Therefore, Ross Stores's Price to Graham Number ratio for today is 3.13.
The historical rank and industry rank for Ross Stores's Graham Number or its related term are showing as below:
ROST'
s Price-to-Graham-Number Range Over the Past 10 Years
Min: 2.75 Med: 3.2 Max: 15.76
Current: 3.13
During the past 13 years, the highest Price to Graham Number ratio of Ross Stores was 15.76. The lowest was 2.75. And the median was 3.20.
ROST's Price-to-Graham-Number is ranked worse than 82.88% of 701
companies
in the Retail - Cyclical industry
Industry Median: 1.29
vs ROST: 3.13
Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.
Ross Stores Graham Number Historical Data
The historical data trend for Ross Stores's Graham Number can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
* Premium members only.
Ross Stores Annual Data
Trend
Jan15
Jan16
Jan17
Jan18
Jan19
Jan20
Jan21
Jan22
Jan23
Jan24
Graham Number
31.22
7.06
35.56
35.11
42.64
Ross Stores Quarterly Data
Apr19
Jul19
Oct19
Jan20
Apr20
Jul20
Oct20
Jan21
Apr21
Jul21
Oct21
Jan22
Apr22
Jul22
Oct22
Jan23
Apr23
Jul23
Oct23
Jan24
Graham Number
35.15
35.81
37.36
39.31
42.64
Competitive Comparison
For the Apparel Retail subindustry, Ross Stores's Price-to-Graham-Number, along with its competitors' market caps and Price-to-Graham-Number data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Ross Stores Price-to-Graham-Number Distribution
For the Retail - Cyclical industry and Consumer Cyclical sector, Ross Stores's Price-to-Graham-Number distribution charts can be found below:
* The bar in red indicates where Ross Stores's Price-to-Graham-Number falls into.
Ross Stores Graham Number Calculation
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
Ross Stores's Graham Number for the fiscal year that ended in Jan. 2024 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Ross Stores (NAS:ROST) Graham Number Explanation
Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:
Current price should not be more than 15 times average earnings of the past three years.
Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)
Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.
In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.
Ross Stores's Price to Graham number Ratio for today is calculated as
Price to Graham number
=
Share Price (Today)
/
Graham number (Q: Jan. 2024 )
=
133.65
/
42.64
=
3.13
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Please keep these in mind:
1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.
Ross Stores Graham Number Related Terms
Thank you for viewing the detailed overview of Ross Stores's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
Ross Stores operates as an off-price apparel and accessories retailer with the majority of its sales derived from its Ross Dress for Less banner. The firm opportunistically procures excess brand-name merchandise made available via manufacturing overruns and retail liquidation sales at a 20%-60% discount to full prices. As such, its stores are frequently filled with a vast array of stock-keeping units, each with minimal product depth that creates a treasure hunt shopping experience. The firm's more than 1,750 Ross Dress for Less stores are primarily located in densely populated suburban communities and typically serve middle-income consumers. Ross also operates nearly 350 DD's Discounts chains that target lower-income shoppers.
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