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Costco Wholesale COST Stock Price, News & Analysis

The ex-dividend date is Thursday, February 1st. Costco Wholesale Corporation is central to the global warehouse membership club story. The company was founded in 1983 by Jim Sinegal and Jeffrey Brotman but its history dates back to 1976 because of the merger with Price Club.

The retailer turned $58.4 billion worth of revenue into a per-share profit of $3.92, up from the year-ago comparisons of $55.3 billion and $3.30 per share (respectively). The analyst community was only calling for per-share earnings of $3.62. It owned 206 stores and was called PriceCostco for a time. The Price family eventually exit the business in favor of new operations resulting in the rebranding to Costco Wholesale Corporation.

The Price family’s new business is called PriceSmart and operates a chain of membership clubs in the Caribbean and Central America. Price Club’s first store, opened in an old Howard Hughes airplane hangar, is still in operation and known as Costco #401. As is the case with musical chairs, though, eventually the music does stop. The ensuing weakness encourages more investors to rethink their positions or prevent would-be buyers from jumping in. That weakness prompts even more doubt among investors, and so on. All of a sudden, a stock that once commanded incredible premium prices no longer does.

  1. Costco Wholesale saw a increase in short interest in the month of February.
  2. Costco Wholesale Corporation is central to the global warehouse membership club story.
  3. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on, top-rated podcasts, and non-profit The Motley Fool Foundation.
  4. The Price family eventually exit the business in favor of new operations resulting in the rebranding to Costco Wholesale Corporation.

We maintain that Costco’s vast scale and merchandising strategy prompts an enviable cost advantage in a crowded retail environment. We plan to raise our $480 fair value estimate by a mid-single-digit percentage as we make a favorable adjustment to our near-term revenue outlook. However, we still view Costco’s shares as overvalued.

Is Costco Stock Worth Its High Price?

Upgrade to MarketBeat All Access to add more stocks to your watchlist. 3,447 employees have rated Costco Wholesale Chief Executive Officer Craig Jelinek on Craig Jelinek has an approval rating of 92% among the company’s employees. This puts Craig Jelinek in the top 30% of approval ratings compared to other CEOs of publicly-traded companies. The company is scheduled to release its next quarterly earnings announcement on Thursday, May 23rd 2024.

As noted, shares are trading at more than 50 times their trailing earnings, and boast a forward-looking price-to-earnings ratio of over 40. This is the frothiest valuation we’ve seen Costco trading at since the late-1990s, in fact, when it was still berkshire hathaway portfolio tracker fairly young and spending heavily to reshape itself into what it ultimately needed to become. The stock is now trading at more than 50 times its trailing earnings, and over 40 times next fiscal year’s projected earnings of $17.24 per share.

The company also operates gasoline, pharmacies, optical, food courts, hearing-aid centers, and tire installation centers; and offers business delivery, travel, grocery, and various other services online. The company was formerly known as Costco Companies, Inc. and changed its name to Costco Wholesale Corporation in August 1999. Costco Wholesale Corporation was founded in 1976 and is based in Issaquah, Washington. 23 Wall Street research analysts have issued «buy,» «hold,» and «sell» ratings for Costco Wholesale in the last twelve months.

It also saw quick success and went public in 1980. The Price family turned down an offer to merge with Walmart’s Sam’s Club in favor of a more suitable match-up with Costco. Coincidentally, Costco founder Jim Sinegal got his start in the retail business working for Sol Price at his original membership club, FedMart. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.

Hot Stock Alert: 3 Companies Even Warren Buffett Would Envy

Costco, originally known as Costco Companies, quickly grew in its first two years and became the 1st company to go from $0 to $3 billion in revenue within the 1st 3 years. Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data. With average gains of 150% since the start of 2023, now is the time to give these stocks a look and pump up your 2024 portfolio. Price Club was founded in 1976 by the Price family. It was among the very first warehouse membership clubs and targeted small merchants and businesses.

How Costco stock’s crazy valuation got so crazy

It could take several weeks for this bearish overhang to drive the stock back to a more palatable valuation — probably somewhere nearer 30 times per-share earnings. That’s much closer to the metric’s long-term average. Costco stock has reached that point — and then some.

We were impressed by wide-moat Costco’s fiscal 2024 second-quarter results as the firm’s attractive product assortment and low prices continued driving strong traffic through its warehouses. Net sales improved nearly 6% to over $57 billion, driven by a robust 5.8% increase in companywide comparable sales (excluding fuel and foreign currency fluctuations). In the US, Costco’s comparable sales growth of 4.8% exceeded our 3.5% forecast amid a stronger-than-expected 4.3% uptick in volume, with management citing revenue growth across each of its core merchandise categories. Internationally, comparable sales again expanded at a high-single-digit pace—9.0% in Canada and 8.2% in other international markets—as the retailer’s banner continues to garner global merit.

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