Costco (COST) Outpaces Stock Market Gains: What You Should Know
Costco (COST) closed at $245.87 in the latest trading session, marking a +0.6% move from the prior day. This change outpaced the S&P 500's 0.46% gain on the day. At the same time, the Dow added 0.15%, and the tech-heavy Nasdaq gained 0.59%.
Heading into today, shares of the warehouse club operator had gained 12.74% over the past month, outpacing the Retail-Wholesale sector's gain of 2.85% and the S&P 500's gain of 3.24% in that time.
COST will be looking to display strength as it nears its next earnings release. In that report, analysts expect COST to post earnings of $1.82 per share. This would mark year-over-year growth of 7.06%. Meanwhile, our latest consensus estimate is calling for revenue of $34.74 billion, up 7.34% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.91 per share and revenue of $152.40 billion. These totals would mark changes of +15.81% and +7.64%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for COST. These revisions help to show the ever-changing nature of near-term business trends. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which 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. The Zacks Consensus EPS estimate has moved 3.3% higher within the past month. COST is currently sporting a Zacks Rank of #2 (Buy).
Digging into valuation, COST currently has a Forward P/E ratio of 30.89. Its industry sports an average Forward P/E of 20.81, so we one might conclude that COST is trading at a premium comparatively.
Meanwhile, COST's PEG ratio is currently 3.47. 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. The Retail - Discount Stores was holding an average PEG ratio of 1.99 at yesterday's closing price.
The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 111, putting it in the top 44% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Costco Wholesale Corporation (COST) : Free Stock Analysis Report
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