Costco (COST) Stock Falls as Market Improves: Some Information for Investors

The latest trading session ended with Costco (COST) at $960.89, representing a shift of -0.32% from the closing price of the previous trading day. The stock’s performance lagged behind the S&P 500’s daily gain of 0.3%. Meanwhile, the Dow was up 0.99% and the tech-dominated Nasdaq was up 0.27%.

Shares of the warehouse club operator have gained 8.17% over the past month, outpacing the Retail-Wholesale sector’s gain of 3.51% and the S&P 500’s gain of 2.1%.

Costco’s upcoming earnings release will be of great interest to investors. The company’s earnings report is expected on December 12, 2024. The company is expected to report earnings per share of $3.79, up 8.91% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $62.37 billion, up 7.9% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $17.75 per share and revenue of $273.33 billion, which would represent changes of +10.18% and +7.42%, respectively, from the year-ago quarter corresponds to the previous year.

Any recent changes to analyst estimates for Costco should also be noted by investors. These recent adjustments often reflect the changing dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.

Our research shows that these estimate changes are directly correlated with near-term share price performance. To take advantage of this, we have developed the Zacks Rank, a quantitative model that takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988 achieved. Over the past month, the Zacks Consensus EPS estimate has moved 0.02% higher. Currently, Costco has a Zacks Rank of #3 (Hold).

In terms of valuation, Costco is currently trading at a Forward P/E ratio of 54.3. Its industry sports an average Forward P/E of 20.45, so one could conclude that Costco is trading at a premium comparatively.

It is also important to note that COST is currently trading at a PEG ratio of 5.95. The PEG ratio is similar to the commonly used P/E ratio, but this parameter also includes the company’s expected earnings growth trajectory. At the end of yesterday’s trading, the Retail Discount Industry industry had an average PEG ratio of 2.44.

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