Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Ross Stores Inc., FCFE calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
The analysis of cash flow metrics reveals a period of consistent growth followed by significant volatility in the final two years of the observed period.
- Net Cash Provided by Operating Activities
- A positive upward trajectory is evident from January 28, 2017, through January 30, 2021, with cash flows increasing from approximately 1.56 billion US$ to a peak of 2.25 billion US$. This trend indicates a steady improvement in the operational capacity to generate cash from core business activities. However, a contraction occurred by January 29, 2022, where operating cash flows declined to 1.74 billion US$, representing a decrease of approximately 22.6% from the prior year's peak.
- Free Cash Flow to Equity (FCFE)
- FCFE demonstrated steady growth between 2017 and 2020, rising from 1.26 billion US$ to 1.62 billion US$. A substantial spike is observed on January 30, 2021, where FCFE reached 3.80 billion US$, marking a significant deviation from the historical trend. This peak was followed by a sharp correction on January 29, 2022, with FCFE falling to 1.12 billion US$, which is the lowest value recorded across the analyzed timeframe.
- Comparative Cash Flow Dynamics
- For the period between 2017 and 2020, FCFE tracked closely with net cash provided by operating activities. A notable divergence occurred in 2021, where FCFE significantly exceeded operating cash flow, suggesting a large influx of cash from financing activities or a substantial reduction in capital expenditures. In 2022, both metrics declined, but the reduction in FCFE was more pronounced than the decline in operating cash flows, indicating a tighter cash position for equity holders.
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Price to FCFE Ratio, Current
Ross Stores Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 344,371,009 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 1,116,009) |
| FCFE per share | 3.24 |
| Current share price (P) | 115.36 |
| Valuation Ratio | |
| P/FCFE | 35.60 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Amazon.com Inc. | 132.83 |
| Home Depot Inc. | 25.09 |
| Lowe’s Cos. Inc. | 10.59 |
| TJX Cos. Inc. | 31.00 |
| P/FCFE, Sector | |
| Consumer Discretionary Distribution & Retail | 110.93 |
| P/FCFE, Industry | |
| Consumer Discretionary | 68.11 |
Based on: 10-K (reporting date: 2022-01-29).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Ross Stores Inc., historical P/FCFE calculation, comparison to benchmarks
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 350,892,474 | 356,523,349 | 355,896,821 | 368,247,009 | 378,713,373 | 391,895,145 | |
| Selected Financial Data (US$) | |||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 1,116,009) | 3,797,918) | 1,616,063) | 1,567,779) | 1,325,836) | 1,260,971) | |
| FCFE per share3 | 3.18 | 10.65 | 4.54 | 4.26 | 3.50 | 3.22 | |
| Share price1, 4 | 95.55 | 120.38 | 86.97 | 93.76 | 76.20 | 65.77 | |
| Valuation Ratio | |||||||
| P/FCFE5 | 30.04 | 11.30 | 19.15 | 22.02 | 21.77 | 20.44 | |
| Benchmarks | |||||||
| P/FCFE, Competitors6 | |||||||
| Amazon.com Inc. | 240.95 | — | — | — | — | — | |
| Home Depot Inc. | 19.87 | 15.41 | — | — | — | — | |
| Lowe’s Cos. Inc. | 13.55 | 12.28 | — | — | — | — | |
| TJX Cos. Inc. | — | 10.55 | — | — | — | — | |
| P/FCFE, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 51.89 | 59.10 | — | — | — | — | |
| P/FCFE, Industry | |||||||
| Consumer Discretionary | 36.45 | 83.41 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
1 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,116,009,000 ÷ 350,892,474 = 3.18
4 Closing price as at the filing date of Ross Stores Inc. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 95.55 ÷ 3.18 = 30.04
6 Click competitor name to see calculations.
An analysis of the financial metrics from 2017 to 2022 reveals a period of growth followed by significant volatility in cash flow and valuation multiples. While the share price generally trended upward until reaching a peak in 2021, the underlying free cash flow to equity (FCFE) exhibited a non-linear trajectory, leading to substantial fluctuations in the P/FCFE ratio.
- Share Price Movement
- The share price experienced a consistent ascent from 65.77 USD in 2017 to a peak of 120.38 USD in 2021. A correction occurred in 2022, with the price retreating to 95.55 USD, although it remained higher than the levels observed in the first three years of the analyzed period.
- FCFE per Share Performance
- Free cash flow to equity per share showed steady growth between 2017 and 2020, rising from 3.22 USD to 4.54 USD. A significant anomaly occurred in 2021, where FCFE per share spiked to 10.65 USD. However, this gain was not sustained, as 2022 saw a sharp decline to 3.18 USD, returning the metric to levels slightly below those of 2017.
- P/FCFE Valuation Dynamics
- The P/FCFE ratio remained relatively stable between 2017 and 2019, fluctuating within a narrow range of 20.44 to 22.02. In 2021, the ratio compressed to a period low of 11.30, driven primarily by the surge in FCFE per share. Conversely, the ratio expanded sharply to 30.04 in 2022, reflecting the combined impact of a decreased share price and a substantial reduction in free cash flow to equity.
The divergence between share price and FCFE in the final two years of the period indicates a shift in valuation. The extreme expansion of the P/FCFE ratio in 2022 suggests that the market price remained relatively resilient compared to the sharp contraction in cash flow generation.
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