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Costco (COST) Outpaces Stock Market Gains: What You Should Know

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Costco (COST - Free Report) closed the most recent trading day at $379.53, moving +1.97% from the previous trading session. This change outpaced the S&P 500's 1.22% gain on the day.

Heading into today, shares of the warehouse club operator had gained 2.49% over the past month, outpacing the Retail-Wholesale sector's loss of 5.25% and the S&P 500's loss of 1.49% 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. In that report, analysts expect COST to post earnings of $2.27 per share. This would mark year-over-year growth of 20.11%. Our most recent consensus estimate is calling for quarterly revenue of $44.81 billion, up 20.23% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.97 per share and revenue of $190.41 billion, which would represent changes of +12.66% and +14.18%, respectively, from the prior year.

Any recent changes to analyst estimates for COST should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 0.52% higher. COST currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, COST is holding a Forward P/E ratio of 37.31. Its industry sports an average Forward P/E of 26.57, so we one might conclude that COST is trading at a premium comparatively.

Meanwhile, COST's PEG ratio is currently 4.25. 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 2.29 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 208, which puts it in the bottom 19% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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