Costco Wholesale's stock has become the Palantir Technologies of the retail world, boasting a steep valuation and an ardent investor base. The warehouse giant continues to deliver value to its 77 million members worldwide with unbeatable deals like $4.99 rotisserie chickens and a $1.50 hot dog and soda combo—unchanged for 40 years.
Costco Wholesale (COST -0.62%) can be a fun place to shop. In exchange for an annual membership fee, it offers low-priced products its customers want.
Costco Wholesale (COST -1.09%) passed $1,000 a share on Dec. 11, reaching a new all-time high and pushing its market capitalization past $440 billion. Costco's stock price is up big this year, but its earnings aren't growing that quickly.
Price hikes are only partially offsetting volume declines, but a rise in membership fees can lift overall comps in the future as customers' membership renewal periods trigger. Warehouse expansion-led growth is performing better than I expected, as productivity and return metrics such as fixed asset turnover and pre-tax ROICs have shown no signs of deterioration. Valuations are even higher vs median comps than last time but COST stock is still ticking along, supported by the fundamental tailwind of earnings growth expectations.
Costco is the latest retailer to warn that President-elect Trump's proposed tariffs would raise costs. However, the warehouse giant said it's hard to predict the impact.
Highly valued or not, Costco NASDAQ: COST can continue to rally in 2025. The stock is pricey, trading at 55x its current year earnings estimate.
When it comes to retail giant Costco Wholesale (COST 0.36%), there are plenty of things filling up the headlines. First and foremost, Costco stock just crossed $1,000 per share for the first time.
Costco (COST 0.36%) is one of the best-performing large-cap retail stocks over the past five years. It continued to show why it's one of the top retailers when it once again reported strong results for its fiscal first quarter.
I am rating Costco a “sell” with a price target of $832, as its current valuation fully prices in projected FY25 revenue and operating income growth of 10% and 28% YoY, respectively. With the recent 8.3% increase in membership fees, effective as of September, Costco could see a 61% YoY in membership income, assuming minimal churn and a growing mix of Executive members. Costco's expansion plans and e-commerce growth are positive, but uncertain macroeconomic conditions and declining sales per member could hurt profitability.
The president-elect has said he plans to slap a 25% levy on all goods entering the US from Mexico and Canada.
Costco (COST) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
Costco has significantly outperformed the S&P 500, rising 35% in nine months, prompting a reassessment of its stock rating from Hold to Buy. Despite a high P/E ratio, Costco's strong retail operations and potential in Retail Media Networks justify a small Buy position. Costco's unique customer loyalty and comprehensive purchase data position it well to challenge Amazon in the RMN space, potentially generating substantial future revenue.