3 Reasons to Buy Costco Stock Like There's No Tomorrow

Core Insights - Costco Wholesale's stock has increased by 614% over the last decade, significantly outperforming competitors like Walmart and Target, which saw increases of 170% and 155% respectively [1] - The company has a strong customer loyalty with a 90% global membership renewal rate, contributing to its reputation as a reliable long-term investment option [1] Membership Fee Increase - Costco announced its first membership fee hike in seven years, raising the basic membership by $5 to $65 and the executive tier by $10 to $130, effective September 1 [3] - This change is expected to impact approximately 52 million paid memberships, potentially leading to a significant earnings boost [3] - The company has implemented additional measures to promote revenue growth, such as requiring membership cards for food court access and I.D. at the register to prevent membership sharing [3] E-commerce Expansion - Costco operates 878 locations worldwide and has opened 17 new warehouses since last year, with over 80% of its stores in North America, indicating potential for further expansion [5] - The e-commerce segment saw a revenue increase of 21% in the fiscal third quarter of 2024, alongside a 32% rise in app downloads and a 28% increase in Costco Logistics deliveries [5] - The global e-commerce market is projected to grow from $19 trillion in 2022 to $48 trillion by 2030, presenting significant growth opportunities for Costco [6] Advertising Network Development - Costco is developing an advertising network that will leverage membership data for targeted advertising, aiming to enhance revenue diversification [6] - The retail media space is projected to reach $166 billion by 2025, positioning Costco to capitalize on this growing industry [7] Valuation Metrics - Costco's price/earnings-to-growth (PEG) ratio has decreased by 58% over the past year, indicating that the stock remains a value compared to its growth potential [8] - A lower PEG ratio suggests that Costco's stock could be a worthwhile investment opportunity [8]