And its e-commerce business grew by 16.3% during that time frame. The P/E ratio is a widely used metric to gauge how much investors are willing to pay for each dollar of a company’s earnings. A higher P/E often suggests that investors expect higher earnings growth in the future compared to companies with lower P/Es. With Costco’s stock establishing itself above the $1,000 mark, attention naturally turns to its valuation.
Fair Value of COST stock based on Discounted Cash Flow (DCF)
And investors have recognized this, flocking to these shares as safe-haven investments amid economic uncertainty. In the second quarter of fiscal 2025, these fees amounted to $1.193 billion. Critically, membership renewal rates serve as a key indicator of customer satisfaction and revenue stability; at the end of Q2 FY25, Costco reported a U.S. and Canada renewal rate of 92.9% and a worldwide rate of 90.5%.
- The P/E ratio is a widely used metric to gauge how much investors are willing to pay for each dollar of a company’s earnings.
- Tariffs may not impact all companies equally; Costco’s unique business model could mitigate typical margin pressures.
- If Costco can offer softening remarks related to tariffs, that could be good for stock price movement to the upside.
- Coming in at just 3.5% of the notional value of the stock price, this earnings announcement sits well under the typical 5%-10% range we see for most companies.
- The company also operates more than 665 gas stations across its footprint and a robust eCommerce channel.
- To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
Versace: Fed Still Has Things to Digest, COST & MRVL Stocks to Watch
Coincidentally, Costco founder Jim Sinegal got his start in the retail business working for Sol Price at his original membership club, FedMart. Costco Wholesale Corporation is central to the global warehouse membership club story. The company was founded in 1983 by Jim Sinegal and Jeffrey Brotman but its history dates back to 1976 because of the merger with Price Club. Costco, originally known as Costco Companies, quickly grew in its first two years and became the 1st company to go from $0 to $3 billion in revenue within the 1st 3 years. Discover which analysts rank highest on predicting the price target of COST. Discover which analysts rank highest for COST overall weighted by direction, price target, and price movement.
Price Score
CNBC’s Jim Cramer on Friday guided investors through next week on Wall Street, saying quarterly reports from Nvidia, Costco, Dell and Salesforce have the potential to move their respective sectors and… Select to analyze similar companies using key performance metrics; select up to 4 stocks. Cameco Corp, Paladin Energy, and BWX Technologies were all up more than 40% in 2024. The biggest market moves could still be ahead of us, and there are seven nuclear energy stocks that could rise much higher in the next several months. While Costco Wholesale currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys. MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
- David Bellinger describes the tariff test facing big box retailers.
- While earnings are typically a high implied volatility event for most companies, Costco has one of the lowest implied stock price ranges we’ve seen this quarter.
- Furthermore, operational efficiency contributes to its strong performance.
- Simeon Gutman, Morgan Stanley retail analyst, joins ‘The Exchange’ to discuss the tariff impact for retailers.
But with a trusted brand and strong financials, Walmart is the type of stock you can buy and forget about for a long while. Both of these stocks have generated some strong gains over the past year, and inevitably, valuation will be a big question mark when deciding which of these stocks to buy. In the long run, the company has promising opportunities in expanding via online retail, it plans to open more stores in the U.S., and its acquisition of TV maker Vizio can enhance its growth opportunities in advertising. Select to analyse similar companies using key performance metrics; select up to four stocks.
Options, futures, and futures options are not suitable for all investors. Costco has strengthened its position as a retail powerhouse, thanks to its strong membership model, competitive pricing and ability to adapt to evolving market trends. While the stock’s premium valuation might deter some investors, its steady growth, robust financial health and strategic initiatives indicate the potential for further upside. Current investors may consider holding or adding to their positions, while prospective investors could see any dips as a buying opportunity.
Costco: Hold This Potential Future Dividend Aristocrat
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As of the year-end calendar 2022, the company operated more than 840 stores and was on track to open new stores in the coming years. Total revenue in 2022 topped $226 billion, the company employs more than 304,000 individuals and it is a member of the S&P 500, the S&P 100 and the NASDAQ 100. Tastycrypto is provided solely by tasty Software Solutions, LLC.
The Motley Fool has positions in and recommends Costco Wholesale and Walmart. Ultimately, I give the edge to Walmart when it comes to growth. Costco, meanwhile, has been expanding its global presence, opening fxcm canada review multiple stores in China last year. And with just seven locations in the country, there’s a huge opportunity to expand there, along with other markets.
Several core fundamental strengths have propelled Costco’s stock to its current levels. Central to its enduring appeal is the membership-based business model. This structure cultivates customer loyalty and generates a predictable, high-margin revenue stream from membership fees. Several core fundamental strengths have propelled Costco’s stock to its current levels. The company operates through a network of subsidiaries that own warehouses in 11 countries, including the US and Puerto Rico.
Costco’s strong customer loyalty fuels consistent sales growth. In the second quarter of fiscal year 2025, ending February 16, 2025, the company reported a 9.1% year-over-year increase in net sales, reaching $62.53 billion. For the first 35 weeks of fiscal 2025, net sales grew 8.2% to $180.05 billion.
Looking at the implied volatility of the options market, we can see a +/- $35.39 implied move for the week. The stock is hovering around $1,015 per share, so this is a very low implied move for a binary event like an earnings announcement. Still, looking to the August 2025 options cycle we can see a +/- $86.71 expected stock price range. This is still a very low implied range for the next 80 days, which tells us the market may be content with the stock price chopping around $1,000 for the foreseeable future.
“There’s probably not a lot that can come from this print that will change the market’s perception that Costco is a good place to be,” UBS analysts wrote. “Though, its superior position, levers, and capabilities to manage the upcoming headwinds will probably be more evident as the impact of tariffs become translucent in the coming months.” Copyright © 2025 FactSet Research Systems Inc.© 2025 TradingView, Inc. Stephanie Link, Hightower Advisors long-term secrets to short-term trading by larry williams chief investment strategist on portfolio manager, joins ‘Squawk Box’ to break down Walmart’s quarterly earnings results, the challenges facing Starbucks, Dick’s Spor… US retail stocks are in focus this week after the Bureau of Labour Statistics said that inflation was up slightly less-than-expected in April.
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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. The company offers branded and private-label products in a range of merchandise categories. The company also operates gasoline, pharmacies, optical, food courts, hearing-aid centers, and tire installation centers; and offers business delivery, travel, grocery, and various other services online. Costco is set to report quarterly earnings on Thursday after the market closes.
Home Depot (HD) topped its first quarter revenue estimates ($39.86 billion vs. expectations of $39.29 billion) while falling just shy of adjusted earnings estimates ($3.56 vs. estimates of $3.59 per share). Same-store sales declined by 0.3%, more than the 0.2% loss that was expected. On top of all this, the home improvement retailer stated that it doesn’t plan to raise prices amid the Trump administration’s tariff policies and trade war concerns.
As of May 22, 2025, the shares traded at around $1,025, bringing its market capitalization to the vicinity of $455 billion. Costco’s strong customer loyalty fuels consistent sales growth. Tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended algorithmic trading strategies to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person.
