Why Shares of Costco Stock Zoomed Higher in 2024

Stock Performance - Costco Wholesale shares surged 38 8% in 2024, driven by strong market performance and expansion of its price-to-earnings (P/E) multiple from 45 to 54 [1][2] - The company's market capitalization exceeded $400 billion, with annual sales reaching$ 260 billion [1] E-commerce Growth - E-commerce revenue grew 17 1% in the quarter, more than triple the overall revenue growth, highlighting the importance of increasing e-commerce presence to compete with Amazon and Walmart [2] Retail Model and Revenue - Costco's membership-based retail model and bulk pricing strategy have solidified its competitive position, leading to a 5 7% year-over-year revenue growth in Q4 2024 to $94 billion [4] - The US business showed 6% revenue growth, indicating significant potential for global expansion [4] Valuation and Growth Prospects - Costco has historically traded at a premium P/E due to consistent earnings growth and a robust business model, but the current P/E of 54 is close to its 10-year high and well above the 10-year average of 36 [5][6] - With$ 260 billion in annual sales, rapid growth may be challenging, and a reversion of the P/E to its long-term average could pose risks [6]