Costco stock plunged in early 2021, as many investors feared that the coronavirus vaccine rollout would undermine its sales momentum. Instead, the warehouse club operator has continued to report strong sales gains every month, leading investors to pile back into the stock.
Full Answer
Why did Costco stock fall despite comps growth?
While Costco sustained the momentum in November, its growth rate wasn’t impressive. The comps growth slowed sequentially. Management blamed the timing of Thanksgiving, Black Friday, and Cyber Monday for the growth moderation.
Should you Buy Costco stock ahead of earnings?
Costco appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Is Costco going to split?
Data source: Costco investor relations. As you can see, Costco has done stock splits in the past, even though it hasn't done so lately. The company has been remarkably consistent in its total return to shareholders, producing average annual gains of more than 15% since the mid-1990s.
When will Costco split?
Costco hasn't split its stock in 16 years, but its share price suggests it could be ready for ...
Why did Costco share price drop?
Costco Stock Is Slipping Because Investors Wanted More Than Strong Earnings. Costco Wholesale stock is edging lower Friday even as the discount retailer reported fiscal second-quarter earnings that came in ahead of expectations.
Is Costco stock a good investment?
The warehouse club's shares have been falling, but investors have nothing to worry about. The market crash has driven stocks into a bear market panicking many investors as strong companies with solid results see their shares tank.
What is the prediction for Costco stock?
Stock Price Forecast The 26 analysts offering 12-month price forecasts for Costco Wholesale Corp have a median target of 555.00, with a high estimate of 650.00 and a low estimate of 440.00. The median estimate represents a +17.52% increase from the last price of 472.25.
Is Costco doing well financially?
Costco is a best-of-breed retailer. the S&P 500's 8% increase over the same time period. The company's stock has been no slouch over the long run, either -- Costco shares have rewarded investors with a 291% gain over the past five years, equating to an average annualized return of 58%.
Is Costco a Buy Sell or Hold?
Costco Wholesale has received a consensus rating of Buy. The company's average rating score is 2.80, and is based on 20 buy ratings, 5 hold ratings, and no sell ratings.
Who owns the most Costco stock?
Vanguard Group Inc.The top individual insider shareholders of Costco are Craig Jelinek, Charles Munger, and Patrick Callans, and the top institutional shareholders are Vanguard Group Inc., BlackRock Inc., and State Street Corp.
What will Costco stock be in 2025?
As for its baseline Costco stock forecast 2025, Wallet Investor predicted that the price could rise further to $820.937.
What is the target price for Amazon stock?
Stock Price Target AMZNHigh$212.50Median$175.00Low$112.50Average$177.88Current Price$116.15
Will Home Depot stock go up?
Stock Price Forecast The 29 analysts offering 12-month price forecasts for Home Depot Inc have a median target of 356.00, with a high estimate of 470.00 and a low estimate of 300.00. The median estimate represents a +18.72% increase from the last price of 299.86.
Is Costco a good stock to buy 2022?
Costco's business is packed full of potential In fiscal 2022's second quarter (ended Feb. 13) Costco reported a 16% boost in sales year over year to $51 billion. In March, sales rose even higher with a 19% year-over-year increase. At the start of the pandemic, sales rose as customers stocked up on essentials.
Who owns Costco now?
Costco Wholesale Corporation currently owns Costco. It is the result of a merger of two companies: Price Club and Costco. W. Craig Jelinek is the current CEO of Costco Wholesale Corporation, and Hamilton E. James is the chairman of the board.
What are Costco's weaknesses?
Weaknesses of Costco The consumer can only purchase the goods in bulk, individual choices are limited. The availability of Costo warehouses is less as compared to different other retail shops. Due to the low-price strategy, the profit margin is low.
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What's Down
Shares of Costco (COST) were down more than 2% after the company released its latest earnings report. It's quite unusual these days to see Costco's stock price down. It's also double surprising to see the price dropped even though the company announced it's bringing back popular food court items and food sampling.
Amazon's acquisition of Whole Foods left Costco investors fearing the worst. Here's what you need to know
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What happened
Shares of Costco Wholesale Corporation ( NASDAQ:COST) declined as much as 8.4% Friday, and traded down 5.6% as of 1:30 p.m. EDT following news that Amazon.com ( NASDAQ:AMZN) will acquire Whole Foods Market ( NASDAQ:WFM).
So what
This morning Amazon announced it will acquire Whole Foods in an all-cash transaction for $42 per share, valuing the organic grocery chain at $13.7 billion including its net debt.
Now what
At the same time, Costco makes up for its slim merchandise margins with annual fees -- the cost of which increased for the first time in five years earlier this month -- paid by its loyal membership base.
What happened
Shares of Costco ( COST -0.45% ) took a hit on Friday. The stock declined as much as 7.5% and finished the trading day down about 4.1%.
So what
Highlighting the continued bearishness in the market on Friday, the S&P 500 index declined 0.8%, bringing the market's total decline this week to 11.5%. Shares of Costco tracked similarly throughout the week, falling about 12%.
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Some investors may have felt that it was a good time to take profits on Costco. Shares have risen sharply over the past year. Even including this week's pullback, the stock is up 29% over the past 12 months. This compares to the S&P 500's 5.8% gain over this same time frame.
Now what
Investors have high expectations for Costco, as same-store sales have consistently risen at robust rates. January same-store sales were up 6.6%.
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NASDAQ: COST
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Costco stock has soared to record heights thanks to the company's strong sales momentum, but investors may be expecting too much
Earlier this year, I bought shares of Costco Wholesale ( COST -0.45% ) during a pullback, expecting to hold them for a long time. With its massive purchasing power, rock-bottom prices, and customer loyalty, Costco has one of the deepest moats in the retail industry.
Proving the doubters wrong
Costco Wholesale was one of the retail industry's pandemic-era winners, as consumers looked to cut down on shopping trips by buying in bulk.
How much growth is sustainable?
Analysts expect Costco to record about $214 billion of revenue in fiscal 2022: up 40% from the $153 billion it generated in fiscal 2019. That said, investors shouldn't expect Costco's revenue to continue rising at a double-digit compound annual growth rate as it has over the past three years.
The valuation looks stretched
Following its recent rally, Costco stock trades for 41 times its projected fiscal 2022 earnings: its highest earnings multiple in more than two decades. Clearly, investors have very high expectations today.
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The company is rapidly gaining members and has been a strong pandemic play
Costco Wholesale ( COST 2.08% ) has been a fantastic long-term investment. Over the past decade, the company's share price gains have more than doubled the S&P 500 's returns.
1. Costco knows how to grow and retain members
One of the reasons investors have been talking so much about Costco stock is because the company has done a fantastic job of growing and retaining those members. The company ended fiscal 2021 with 61.7 million paid households -- an increase of 13% from just two years earlier.
NASDAQ: COST
Costco's membership growth is off to a strong start in fiscal 2022 as well, with the company adding another 800,000 members in the first quarter (reported on Dec. 9).
2. Costco has been a great pandemic play
Another reason Costco's stock has got investors talking is because it's been a great investment, even during the pandemic. Since January 2020, Costco's stock has put up returns of 93%, compared to the S&P 500's 48% gains.
A good bet in good times and bad
The great news for Costco investors is that even when the pandemic is in the rear view, the company still has lots of potential to continue growing.
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