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

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In the latest trading session, Costco (COST - Free Report) closed at $455.93, marking a +1.24% move from the previous day. This change outpaced the S&P 500's 0.43% gain on the day.

Prior to today's trading, shares of the warehouse club operator had gained 4.8% over the past month. This has outpaced the Retail-Wholesale sector's loss of 2.76% and the S&P 500's gain of 2.56% in that time.

COST will be looking to display strength as it nears its next earnings release, which is expected to be September 23, 2021. In that report, analysts expect COST to post earnings of $3.44 per share. This would mark year-over-year growth of 9.9%. Meanwhile, our latest consensus estimate is calling for revenue of $61.09 billion, up 14.43% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.55 per share and revenue of $194.01 billion. These totals would mark changes of +19.21% and +16.34%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for COST. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable 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. Within the past 30 days, our consensus EPS projection has moved 0.59% higher. COST is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, COST is holding a Forward P/E ratio of 42.7. This represents a premium compared to its industry's average Forward P/E of 23.57.

Also, we should mention that COST has a PEG ratio of 4.68. 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 1.95 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 79, which puts it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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