Costco (COST) Gains But Lags Market: What You Should Know

In the latest trading session, Costco (COST) closed at $452.39, marking a +0.38% move from the previous day. This move lagged the S&P 500's daily gain of 0.75%.

Prior to today's trading, shares of the warehouse club operator had lost 2.73% over the past month. This has lagged the Retail-Wholesale sector's loss of 2.43% and the S&P 500's loss of 0.05% in that time.

Wall Street will be looking for positivity from COST as it approaches its next earnings report date. On that day, COST is projected to report earnings of $2.52 per share, which would represent year-over-year growth of 10.04%. Meanwhile, our latest consensus estimate is calling for revenue of $47.75 billion, up 10.52% from the prior-year quarter.

COST's full-year Zacks Consensus Estimates are calling for earnings of $11.90 per share and revenue of $211.93 billion. These results would represent year-over-year changes of +7.4% and +8.17%, respectively.

It is also important to note the recent changes to analyst estimates for COST. These recent revisions tend to reflect the evolving nature of short-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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Within the past 30 days, our consensus EPS projection has moved 2.79% higher. COST is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, COST currently has a Forward P/E ratio of 37.88. This represents a premium compared to its industry's average Forward P/E of 21.15.

Meanwhile, COST's PEG ratio is currently 4.42. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 2.04 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 89, putting it in the top 36% 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.

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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