Costco’s reliance on membership fees is a key driver of its revenue, with renewal rates around 90%. However, saturation in the U.S. market may limit future growth, making international expansion crucial. While promising, global expansion comes with execution risks, especially in competitive markets like China. Additionally, Costco’s high valuation leaves little room for error, as shares trade at over 50 times earnings. Investors should weigh these factors before investing in Costco, considering the potential risks and rewards of owning a stock with a narrow margin of error.

Read more at Nasdaq: 3 Risks to Watch Before Buying Costco Stock