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

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Costco (COST - Free Report) closed the latest trading day at $919.51, indicating a +1.37% change from the previous session's end. The stock's change was more than the S&P 500's daily gain of 0.39%. Meanwhile, the Dow lost 0.13%, and the Nasdaq, a tech-heavy index, added 0.6%.

The warehouse club operator's stock has climbed by 1.97% in the past month, falling short of the Retail-Wholesale sector's gain of 1.99% and outpacing the S&P 500's gain of 1.06%.

The upcoming earnings release of Costco will be of great interest to investors. The company's earnings report is expected on December 12, 2024. The company is forecasted to report an EPS of $3.79, showcasing an 8.91% upward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $62.37 billion, up 7.9% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $17.75 per share and revenue of $273.33 billion. These totals would mark changes of +10.18% and +7.42%, respectively, from last year.

Any recent changes to analyst estimates for Costco should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. 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 exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.02% higher. Right now, Costco possesses a Zacks Rank of #3 (Hold).

Digging into valuation, Costco currently has a Forward P/E ratio of 51.09. This represents a premium compared to its industry's average Forward P/E of 19.78.

We can also see that COST currently has a PEG ratio of 5.6. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Retail - Discount Stores industry had an average PEG ratio of 2.32 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 148, finds itself in the bottom 42% echelons of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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