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Costco (COST) Dips More Than Broader Markets: What You Should Know

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Costco (COST) closed the most recent trading day at $543.28, moving -0.68% from the previous trading session. This change lagged the S&P 500's daily loss of 0.08%. Meanwhile, the Dow lost 0.26%, and the Nasdaq, a tech-heavy index, added 0.08%.

Heading into today, shares of the warehouse club operator had gained 11.03% over the past month, lagging the Retail-Wholesale sector's gain of 11.4% and outpacing the S&P 500's gain of 8.78% in that time.

Wall Street will be looking for positivity from Costco as it approaches its next earnings report date. This is expected to be September 22, 2022. In that report, analysts expect Costco to post earnings of $4.08 per share. This would mark year-over-year growth of 4.62%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $71.02 billion, up 13.32% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $13.08 per share and revenue of $225.88 billion. These totals would mark changes of +18.05% and +15.29%, respectively, from last year.

Any recent changes to analyst estimates for Costco should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.17% higher. Costco is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, Costco is holding a Forward P/E ratio of 41.82. For comparison, its industry has an average Forward P/E of 20.26, which means Costco is trading at a premium to the group.

Meanwhile, COST's PEG ratio is currently 4.56. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. COST's industry had an average PEG ratio of 1.92 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 181, which puts it in the bottom 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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