Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we’ve crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system. Costco’s strong customer loyalty and brand make it among the best growth stocks to buy and hold for the long term.
- Long-term debt is substantial, but the company has enough operating cash to service that debt.
- Costco Wholesale same store sales rose 10% in the month of November.
- It won’t be the only thing that investors will be watching for on Thursday.
- At a price-to-earnings ratio of 41, the valuation is high for a retailer with just 3% comparable sales growth.
- With its vast range of high-quality products, competitive prices, and trusted brand reputation, Costco offers a robust platform for traders to thrive and succeed.
The investment community will be paying close attention to the earnings performance of Costco in its upcoming release. In that report, analysts expect Costco to post earnings of $3.56 per share. At the same time, our most recent consensus estimate is projecting a revenue of $58.81 billion, reflecting a 6.42% rise from the equivalent quarter last year.
There’s no denying this is a high-quality retail business.
The company is also a defendant in several California lawsuits, many of them class actions by former employees. Unfavorable judgments in these litigations could damage Costco’s profitability and business operations. Although supplies later returned to pre-pandemic levels, the company still considers it a potential threat to Costco’s business operations.
Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Overall sales in the quarter were up due to growing demand for Costco’s groceries and essentials. CFO Richard Galanti said that consumers have started returning to buying discretionary items again, after a rough year with high interest rates and the return of student loan payments post-pandemic. He added that increased foot traffic in the stores were an “added surprise.” Their app growth was also a huge factor for Costco’s success. Costco’s app was downloaded 2.75 million times during the quarter, totaling 20.5 million users, which is a 10% increase year over year.
In its most recent update, Costco said that comparable sales excluding foreign exchange and fuel prices were up 3.4% in October, while overall net sales rose 4.5% to $18.53 billion. However, increasing the price of Costco memberships is “a question of when, not if,” CFO Richard Galanti said in the retailer’s Q3 earnings call. “You’ll see it happen at some point. We can’t really tell you if it’s in our plans or not.” There are pros and cons to investing directly in a company like Costco through its Direct Stock Purchase Plan. Investors are required to have minimum balances and investments for both existing shareholders and new shareholders.
Investing in Costco FAQs
But there’s a good case to be made that the stock deserves to trade at a premium because of its track record and resilience. Currently, Costco’s share price is several times higher than its price back then. The company also had a 3-for-2 stock split in March 1992 and a 2-for-1 stock split in May 1991. It has also rewarded investors periodically with special dividends.
The Zacks Analyst Blog Highlights Meta Platforms, Berkshire Hathaway, Costco Wholesale, Comcast and PACCAR
Artificial intelligence (AI) could also help Costco continue improving its bottom line. Global consulting firm McKinsey & Company predicts that generative AI could deliver between $400 billion and $600 billion in additional value to the retail and consumer packaged goods industries. The company is scheduled to release its next quarterly earnings announcement on Thursday, March 7th 2024. Click the link below and we’ll send you MarketBeat’s list of ten stocks that will drive in any economic environment. The Motley Fool has positions in and recommends Berkshire Hathaway, Costco Wholesale, and Walt Disney. Should you decide to purchase Costco Wholesale stock, please be sure to reach out to your local brokerage firm.
Costco stock surged to new highs Friday after pulling back during Thursday’s regular session. The market capitalization sometimes referred as Marketcap, is the value of a publicly listed company. In most cases it can be easily calculated by multiplying the share price with the amount of outstanding shares.
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It also operates e-commerce websites in the United States, Canada, the United Kingdom, Mexico, South Korea, Taiwan, Japan, and Australia. The company was formerly known as Costco Companies, Inc. and changed its name to Costco Wholesale Corporation in August 1999. Costco Wholesale Corporation was founded in 1976 and is based in Issaquah, Washington.
COST fair value
There are several reasons to seriously consider buying shares of Costco. For example, the company has a strong business moat, as it uses a membership-based model. Customers must pay an annual fee to shop in its warehouse stores.
The company has done well under a myriad of economic conditions over the past few years, demonstrating its overall strength and versatility. While Costco is among the highest-priced stocks on the S&P 500, there are stocks even higher priced that haven’t done stock splits. Shares of Chipotle Mexican Grill trade at more than $2,300, while homebuilder NVR has a stock price of trading strategy more than $7,400. A high price alone isn’t enough of a reason to suggest that a stock split is inevitable. Neither Chipotle Mexican Grill nor NVR has ever completed stock splits in their history. If the company were to execute a stock split this year, it would likely split by even more than just 2-for-1, as that would still put the stock at a relatively high price of $350.
