Core Viewpoint - Growth investors are focused on stocks with above-average financial growth, but identifying such stocks can be challenging due to associated risks and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score simplifies the process of finding promising growth stocks by analyzing a company's real growth prospects beyond traditional metrics [2] - Costco (COST) is highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is a critical factor for growth investors, with double-digit growth being particularly attractive [4] - Costco's historical EPS growth rate is 16.2%, with a projected EPS growth of 11.9% this year, surpassing the industry average of 10.7% [5] Group 3: Asset Utilization - The asset utilization ratio, or sales-to-total-assets (S/TA) ratio, is an important indicator of efficiency in growth investing [6] - Costco's S/TA ratio is 3.73, indicating that the company generates $3.73 in sales for every dollar in assets, significantly higher than the industry average of 1.46 [6] Group 4: Sales Growth - Sales growth is another key factor, with Costco expected to achieve a sales growth of 7.4% this year, compared to the industry average of 5.5% [7] Group 5: Earnings Estimate Revisions - Positive trends in earnings estimate revisions are correlated with stock price movements [8] - Costco has seen upward revisions in current-year earnings estimates, with a 0.1% increase in the Zacks Consensus Estimate over the past month [8] Group 6: Overall Positioning - Costco has earned a Growth Score of A and carries a Zacks Rank 2 due to positive earnings estimate revisions, positioning it well for outperformance [10]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps define momentum characteristics, with Costco (COST) currently holding a Momentum Style Score of B [2] - Style Scores complement the Zacks Rank system, which has a strong track record of outperforming the market; Costco has a Zacks Rank of 2 (Buy) [3] Group 2: Costco's Performance Metrics - Costco shares have increased by 6.52% over the past week, while the Zacks Retail - Discount Stores industry has decreased by 0.94% during the same period [5] - Over the past quarter, Costco shares have risen by 14.77%, and they are up 47.49% over the last year, significantly outperforming the S&P 500's gains of 1.43% and 21.95%, respectively [6] - The average 20-day trading volume for Costco is 1,876,515 shares, indicating a bullish sign when combined with rising stock prices [7] Group 3: Earnings Outlook - In the past two months, 6 earnings estimates for Costco have been revised upwards, while none have been revised downwards, increasing the consensus estimate from $17.91 to $18.03 [9] - For the next fiscal year, 7 estimates have moved upwards, with only 1 downward revision, indicating positive earnings momentum [9] Group 4: Conclusion - Given the positive performance metrics and earnings outlook, Costco is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a strong candidate for near-term investment [11]

Core Insights - Costco's January sales results indicate strong performance, with comparable sales growth and increased net sales, which may influence the stock's future trajectory [1][3][10] Sales Performance - For the four weeks ended February 2, 2025, comparable sales in the U.S. grew by 9.2%, while Canada and Other International markets saw increases of 5.7% and 1.1% respectively, leading to a total company comparable sales rise of 7.5% [3] - Net sales for January reached $19.51 billion, up from $17.87 billion in the same period last year, reflecting a 9.2% increase [3] Membership and Revenue Model - Costco's membership-driven model is crucial for growth, with high renewal rates exceeding 90% in key markets, ensuring a reliable revenue stream [2][4] - Paid household memberships rose by 7.6%, and Executive Memberships, which account for 73.1% of worldwide sales, increased by 9.2% during the first quarter of fiscal 2025 [5] Operational Efficiency - The company has demonstrated strong comparable sales growth through both physical and digital platforms, supported by disciplined cost control and product mix optimization [6][7] - Costco's operational efficiencies and strong balance sheet provide a solid foundation for future growth [7] Valuation and Market Position - Costco's stock has increased by 47% over the past year, outperforming the industry average of 24.2%, indicating strong investor confidence [8] - The company's forward 12-month price-to-earnings ratio is 56.57, significantly higher than the industry average of 33.40 and the S&P 500's ratio of 22.54, reflecting its premium valuation [9][10] Earnings Estimates - Analysts have revised earnings per share estimates upward, with current estimates for the fiscal year at $18.03 and $19.69 for the next fiscal year, indicating expected year-over-year growth rates of 11.9% and 9.2% respectively [11]

Group 1 - The stock market has seen significant gains since October 2022, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite increasing by 36%, 56%, and 79% respectively by February 7, 2025 [1] - Artificial intelligence (AI) is a major factor contributing to the stock market's outperformance, with a projected $15.7 trillion addressable market by the end of the decade [2] - Investor enthusiasm surrounding stock splits has also played a role in lifting stock valuations, alongside factors like declining inflation rates and political developments [3] Group 2 - A stock split allows a company to adjust its share price and outstanding share count without affecting its market capitalization or operating performance [4] - Forward stock splits are preferred by investors as they lower the nominal share price, making it easier for retail investors to purchase shares [6] - Companies that conduct forward splits tend to outperform the S&P 500 in the 12 months following the announcement, indicating their strong market position [7] Group 3 - In 2024, over a dozen companies completed stock splits, with only one being a reverse split, highlighting a trend towards forward splits [8] - Costco Wholesale is identified as a leading candidate for a stock split in 2025, with over 36% of its shares owned by retail investors and a high nominal share price of approximately $1,044 [12] - Costco's business model, which includes bulk purchasing and membership fees, contributes to its significant stock performance since its IPO, with a 62,500% gain [12][13] Group 4 - Costco's stock is currently trading at a high valuation of 57 times forecast earnings per share for 2025, which is more than double the S&P 500's consensus P/E ratio [14] - A stock split could help mitigate concerns about Costco's expensive valuation, potentially attracting more investors [15]

Group 1: Stock Performance - Costco's stock closed at $1,061.92, increasing by 1.73% from the previous trading session, outperforming the S&P 500's gain of 0.67% [1] - Over the past month, Costco shares have gained 11.41%, surpassing the Retail-Wholesale sector's gain of 7.15% and the S&P 500's gain of 2.07% [1] Group 2: Upcoming Earnings - Costco's earnings report is expected on March 6, 2025, with projected earnings per share (EPS) of $4.08, reflecting a 9.97% increase from the same quarter last year [2] - Revenue is expected to reach $63.13 billion, showing an 8.02% increase compared to the year-ago quarter [2] Group 3: Full-Year Estimates - The full-year Zacks Consensus Estimates for Costco are earnings of $18.03 per share and revenue of $273.15 billion, representing year-over-year changes of +11.92% and +7.35%, respectively [3] - Recent changes to analyst estimates indicate evolving short-term business trends, with positive revisions reflecting analyst optimism about the company's business and profitability [3] Group 4: Zacks Rank and Performance - The Zacks Rank system, which evaluates estimate changes, currently ranks Costco at 2 (Buy), with a 0.16% rise in the Zacks Consensus EPS estimate over the past month [5] - Historically, 1 ranked stocks in the Zacks Rank system have yielded an average annual return of +25% since 1988 [5] Group 5: Valuation Metrics - Costco is trading at a Forward P/E ratio of 57.9, significantly higher than the industry average of 19.36, indicating a premium valuation [6] - The company has a PEG ratio of 6.21, compared to the Retail - Discount Stores industry's average PEG ratio of 2.08 [7] Group 6: Industry Ranking - The Retail - Discount Stores industry, part of the Retail-Wholesale sector, has a Zacks Industry Rank of 66, placing it in the top 27% of all industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Costco Wholesale Corporation (COST) continued with its decent comparable sales growth in January. The robust performance, driven by notable gains across key regions, reflects Costco’s ability to attract value-conscious shoppers with its competitive pricing and high-quality offerings. As consumer spending patterns evolve, the company’s strong sales growth reaffirms its operational excellence and adaptability in a dynamic retail landscape.Decoding COST’s January CompsCOST’s comparable sales for January illust ...

Bulk-buying, bargain-hunting shoppers propelled Costco Wholesale (COST 0.64%) to a record-breaking 2024 for sales and earnings. The discount retailer is benefiting from a resilient economic backdrop while capitalizing on an ongoing e-commerce expansion. Its latest update highlighted further growth momentum to kick off 2025.With the stock up 47% over the past year and currently trading at an all-time high, can the rally keep going? Let's discuss what to do with shares of Costco Wholesale.The case to buy or h ...

Despite its entrenched position in the U.S. retail sector, this powerful discount chain still has the characteristics of a growth stock.Some investors might automatically assume Costco (COST -0.57%) is an established, slow-growing company. They would be right on one count, but wrong on the other. It is certainly an established leader. But it's not slow-growing. In fact, the membership-based wholesale retailer's earnings per share grew by a high-teens percentage in its fiscal 2024, which ended Sept. 1. Furth ...

The S&P 500 has been on a phenomenal run. After soaring 24% in 2023, it climbed 23% last year. Today, the benchmark index trades in record territory.Naturally, investors are probably wondering if there are any deals in today's market as many of the best businesses in the world trade at expensive valuations. That's why it's a good idea to be patient and wait for the right opportunity. There's one high-quality company that I've been following for some time. The stock, which I believe is overvalued, has soared ...

Core Viewpoint - Costco's shares have increased by 12.5% over the past month, reaching a new 52-week high of $1043.09, and have gained 13.8% year-to-date, outperforming the Zacks Retail-Wholesale sector and the Zacks Retail - Discount Stores industry [1]. Performance Drivers - The stock has consistently exceeded earnings expectations, not missing the consensus estimate in the last four quarters. In the latest earnings report on December 12, 2024, Costco reported EPS of $3.82, surpassing the consensus estimate of $3.79, and beat the revenue estimate by 0.17% [2]. Earnings Projections - For the current fiscal year, Costco is projected to achieve earnings of $18.01 per share on revenues of $272.79 billion, reflecting an 11.79% increase in EPS and a 7.21% increase in revenues. For the next fiscal year, earnings are expected to rise to $19.66 per share on $291.08 billion in revenues, indicating year-over-year changes of 9.18% and 6.7%, respectively [3]. Valuation Metrics - Costco's current valuation shows a Price-to-Earnings (P/E) ratio of 57.9X for the current fiscal year, significantly higher than the peer industry average of 19.9X. The trailing cash flow basis shows a ratio of 49.2X compared to the peer group's average of 17.3X, and the PEG ratio stands at 6.22, indicating that the stock may not be in the top tier from a value perspective [7]. Zacks Rank - Costco holds a Zacks Rank of 2 (Buy) due to rising earnings estimates. The company meets the criteria for selection, as it has a Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, suggesting potential for further share price appreciation in the near term [8].