Costco stock has outperformed the S&P 500, but high valuation raises concerns

From “Nasdaq”: 2024-09-06 00:08:07

Costco (NASDAQ: COST) is set to release its Q4 fiscal results on September 5th, with expectations of little movement in the stock. The company’s stock has risen 35% this year to $879, outperforming Walmart. Costco’s focus on customer experience has fueled growth, but the high valuation of 54 times earnings raises concerns about further gains.

COST stock has outperformed the market for 3 consecutive years. The Trefis High Quality Portfolio, featuring 30 stocks, has also beaten the S&P 500. Revenues are forecasted at $80.4 billion for Q4 2024, with strong renewal rates of 93% in the U.S. and Canada. Earnings match expectations, with an EPS estimate of $5.07.

Costco’s stock price estimate aligns with its current market value, with an estimated EPS of $16.32 and a P/E multiple of 52.1x for fiscal 2024. The company’s financial position includes nearly $11.5 billion in cash and short-term investments, with a net cash balance due to minimal long-term debt. Comparisons with peers provide additional insights for investors.



Read more at “Nasdaq”: Costco Stock Has Grown 2x S&P 500 So Far This Year: More Gains After Q4 Results?