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Costco (COST) Gains But Lags Market: What You Should Know
Costco (COST - Free Report) closed at $384.32 in the latest trading session, marking a +0.41% move from the prior day. This change lagged the S&P 500's 0.74% gain on the day.
Heading into today, shares of the warehouse club operator had gained 5.96% over the past month, outpacing the Retail-Wholesale sector's gain of 1.29% and the S&P 500's gain of 3.21% in that time.
COST will be looking to display strength as it nears its next earnings release, which is expected to be May 27, 2021. On that day, COST is projected to report earnings of $2.25 per share, which would represent year-over-year growth of 19.05%. Meanwhile, our latest consensus estimate is calling for revenue of $43.48 billion, up 16.68% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $9.94 per share and revenue of $189.72 billion, which would represent changes of +12.32% and +13.77%, respectively, from the prior year.
Investors might also notice 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. The Zacks Consensus EPS estimate has moved 0.47% higher within the past month. COST is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, COST currently has a Forward P/E ratio of 38.53. For comparison, its industry has an average Forward P/E of 27.63, which means COST is trading at a premium to the group.
We can also see that COST currently has a PEG ratio of 4.39. 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 2.41 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 180, putting it in the bottom 30% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.