1 Growth Stock Down 10% to Buy Right Now

Core Viewpoint - Costco's stock has declined by 10% over the past year, attributed to investor reallocations towards high-growth sectors and concerns over slowing membership renewal rates [1][4]. Group 1: Current Stock Performance - Costco's stock is currently under pressure, with concerns about its growth not being as impressive as in the past [4]. - Membership sign-ups in the most recent quarter were only 400,000, significantly lower than the typical 1 million [4]. Group 2: Management Insights - Management indicated that lower membership sign-ups are primarily due to younger shoppers who sign up online and renew at a slower pace [5]. - The company aims to improve renewal rates by enhancing engagement with digitally signed-up members, although a slight decline in overall renewal rates may persist for a few more quarters [5]. Group 3: Financial Performance - Despite stock underperformance, Costco reported strong financial results, with earnings per share of $4.50, exceeding the consensus estimate of $4.27 [7]. - Revenue increased by 8% to $67.3 billion, surpassing the analyst consensus estimate of $67.1 billion [7]. - Comparable sales rose by 5.9% in the U.S. and 6.4% overall, with record Black Friday sales exceeding $250 million in non-food orders [8]. Group 4: Market Sentiment - Concerns regarding Costco's renewal rates are considered overblown, as North American membership renewal rates remain high at 92% [6]. - The recent share price pullback is viewed as a potential buying opportunity, given the company's ongoing growth trajectory [6].