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Costco (COST) Outpaces Stock Market Gains: What You Should Know

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Costco (COST) closed the most recent trading day at $554.88, moving +1.6% from the previous trading session. This move outpaced the S&P 500's daily gain of 1.32%. Elsewhere, the Dow gained 0.68%, while the tech-heavy Nasdaq lost 0.15%.

Prior to today's trading, shares of the warehouse club operator had gained 11.11% over the past month. This has outpaced the Retail-Wholesale sector's loss of 0.46% and the S&P 500's gain of 3.61% in that time.

Costco will be looking to display strength as it nears its next earnings release, which is expected to be December 9, 2021. The company is expected to report EPS of $2.59, up 13.1% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $49.61 billion, up 14.82% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $12.15 per share and revenue of $214.79 billion, which would represent changes of +9.66% and +9.63%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Costco. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 2.14% higher within the past month. Costco is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, Costco currently has a Forward P/E ratio of 44.94. For comparison, its industry has an average Forward P/E of 24.27, which means Costco is trading at a premium to the group.

It is also worth noting that COST currently has a PEG ratio of 5.2. 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. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 2.33 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 92, which puts it in the top 37% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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