Costco's stock price nearing four figures may signal a stock split in 2025

From Nasdaq: 2024-12-25 05:46:00

Stock-split stocks statistically outperform the market in the next 12 months following a split, generating an average return of 25% to 30%. Costco Wholesale is nearing a four-figure price, potentially signaling an upcoming stock split in 2025. Despite its solid business model and growth, Costco’s high P/E ratio may not make it a buy at the moment.

Costco’s revenue has grown by 63% in the last five years, with EPS up around 100%. However, with a P/E ratio of 56, the stock may be overvalued for its growth prospects. Analysts suggest focusing on long-term performance rather than short-term stock split hype.

While Costco’s business remains strong, its high P/E ratio and low growth potential may not make it an attractive buy currently. Investors are advised to consider the price they pay for a stock and its earnings growth. Analysts are issuing “Double Down” alerts for potential high-growth companies, highlighting opportunities for lucrative investments.

Investing in companies like Nvidia, Apple, and Netflix during “Double Down” alerts in the past could have resulted in significant returns. The Motley Fool recommends staying informed on potential investment opportunities and making strategic decisions based on long-term growth prospects.



Read more at Nasdaq: This Stock Is Up 106,400% Since Its IPO: Here’s Why It Might Split in 2025.