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Costco (COST) Stock Slides as Market Rises: Facts to Know Before You Trade

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Costco (COST - Free Report) closed the latest trading day at $932.88, indicating a -1.16% change from the previous session's end. The stock trailed the S&P 500, which registered a daily gain of 0.1%. On the other hand, the Dow registered a gain of 0.69%, and the technology-centric Nasdaq increased by 0.06%.

The warehouse club operator's stock has climbed by 6.16% in the past month, exceeding the Retail-Wholesale sector's gain of 5.33% and the S&P 500's gain of 4.37%.

Investors will be eagerly watching for the performance of Costco in its upcoming earnings disclosure. The company is predicted to post an EPS of $3.79, indicating an 8.91% growth compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $62.37 billion, reflecting a 7.9% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $17.75 per share and revenue of $273.33 billion, which would represent changes of +10.18% and +7.42%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Costco. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.1% higher within the past month. Currently, Costco is carrying a Zacks Rank of #2 (Buy).

Looking at its valuation, Costco is holding a Forward P/E ratio of 53.16. For comparison, its industry has an average Forward P/E of 20.11, which means Costco is trading at a premium to the group.

We can additionally observe that COST currently boasts a PEG ratio of 5.82. 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 Retail - Discount Stores industry had an average PEG ratio of 2.33 as trading concluded yesterday.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 33, finds itself in the top 14% echelons of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the 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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