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Costco (COST) Rises Higher Than Market: Key Facts

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Costco (COST - Free Report) closed the most recent trading day at $889.56, moving +0.48% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.4%. Elsewhere, the Dow saw an upswing of 0.09%, while the tech-heavy Nasdaq appreciated by 0.63%.

The warehouse club operator's shares have seen a decrease of 1.72% over the last month, not keeping up with the Retail-Wholesale sector's gain of 3.32% and the S&P 500's gain of 3.76%.

The investment community will be paying close attention to the earnings performance of Costco in its upcoming release. The company's earnings per share (EPS) are projected to be $3.78, reflecting an 8.62% increase from the same quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $62.38 billion, showing a 7.92% escalation compared to the year-ago quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $17.75 per share and revenue of $273.5 billion, indicating changes of +10.18% and +7.49%, respectively, compared to the previous year.

Investors should also take note of any recent adjustments to analyst estimates for Costco. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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. Over the past month, the Zacks Consensus EPS estimate has shifted 0.63% upward. Costco is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, Costco is presently being traded at a Forward P/E ratio of 49.87. For comparison, its industry has an average Forward P/E of 20.83, which means Costco is trading at a premium to the group.

Also, we should mention that COST has a PEG ratio of 5.45. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The average PEG ratio for the Retail - Discount Stores industry stood at 2.42 at the close of the market yesterday.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 162, positioning it in the bottom 36% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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