Costco Wholesale Corporation (NASDAQ:COST) is one of the stocks Jim Cramer shared his take on. During the episode, a caller asked if the stock is back, and Cramer replied: “I was at Costco this weekend, trying to check it out, trying to figure out what the heck is wrong. I think… what’s wrong is the stock got too high. I would’ve thought at 41 times earnings, it’s done going down. That was wrong. We did sell half the position, I can’t believe I sold any of it, for the Charitable Trust. We had to. I don’t ...

Group 1 - Costco Wholesale Corporation (NASDAQ:COST) is involved in a lawsuit against the current administration regarding tariff refunds, which could potentially impact its stock performance positively if successful [1] - The company operates membership warehouses offering a wide range of products and services, including groceries, electronics, and e-commerce options [2] - Recent management changes, including the departure of the CFO Richard Galanti, have raised concerns about the company's performance, particularly in terms of slower monthly signups and membership renewals [2] Group 2 - Despite acknowledging Costco's potential, there are suggestions that certain AI stocks may present greater upside potential and lower downside risk compared to Costco [2]

Costco Wholesale Corporation (NASDAQ:COST) is one of the stocks that Jim Cramer shared his take on. A club member asked if Cramer has any reservations about the management change at the company, given that the stock has been a “laggard all year”. Here’s what he had to say in response: “Look, I have concerns about everything… I was watching Costco today versus Walmart. It was really killing me. I know that Richard Galanti has departed as CFO. New CFO, I think does a good job. I know that the monthly signup ...

Group 1 - Costco Wholesale Corporation (NASDAQ:COST) is recognized for its strong long-term performance, despite recent stock price challenges [1] - The stock is currently trading at 44 times earnings, which is higher compared to the broader market, leading to its "lackluster" performance [1] - Jim Cramer suggests that Costco is a buy opportunity when priced under $900, indicating it is relatively cheaper than its historical valuation [1] Group 2 - Costco operates membership warehouses offering a variety of products including groceries, fresh food, household goods, and electronics [2] - The company also provides additional services such as pharmacies, gas stations, optical centers, and e-commerce options [2]

Core Insights - Costco operates membership warehouses offering a wide range of branded and private-label products, benefiting from a low-margin, high-volume business model that drives strong sales growth and customer loyalty [1][2] Business Model and Operations - The company has over 870 warehouses globally and is expanding its e-commerce platform, leveraging scale efficiencies, membership fee growth, and disciplined cost control [2] - Costco's subscription-based model generates recurring revenue and stable cash flows, while its limited SKU strategy enhances inventory turnover and pricing power against competitors [2] Financial Analysis - Discounted Cash Flow (DCF) analysis indicates forecasted free cash flows (FCF) growing from $7.8 billion in 2025 to $9.8 billion in 2029, with a total present value of FCFs at $33.5 billion [3] - The terminal value, calculated using a perpetuity growth model, is estimated at $144.2 billion, leading to a present value of the terminal value of $92.8 billion [3] - The enterprise value is calculated at $126.3 billion, factoring in net cash of $7.2 billion, resulting in an equity value of $133.5 billion [4][5] Valuation - The intrinsic value per share is estimated at approximately $301, while the current market price is around $890.60, indicating a margin of safety of -66% [5] - Despite Costco's strong free cash flow growth and brand loyalty, shares are trading well above intrinsic value, suggesting that long-term investors may want to wait for a more attractive valuation before making investment decisions [5]

Core Viewpoint - Dollar Tree is highlighted as a strong investment opportunity within the consumer staples sector, particularly appealing to lower-income consumers seeking value [1][2]. Company Overview - Dollar Tree operates discount retail stores offering a variety of low-cost products, including consumables, household goods, toys, party supplies, and seasonal merchandise [2]. - The company has recently spun off its weaker Family Dollar business, which is viewed positively [1]. Market Performance - Despite reporting a solid quarter, Dollar Tree's stock experienced a significant decline of 8% following earnings announcements, contrasting with the performance of Dollar General [2]. - The disparity in stock performance between Dollar Tree and Dollar General is attributed to their differing abilities to manage costs and respond to external pressures, such as tariffs [2]. Investment Potential - The stock is currently trading at less than 15 times next year's earnings, with an anticipated growth rate of 15%, making it an attractive buy [1].

Group 1 - Costco Wholesale Corporation (NASDAQ:COST) is currently experiencing a high price-to-earnings (PE) ratio of 53, which is considered elevated, leading to a recommendation to wait for the PE to drop below 50 before purchasing [1] - The company operates membership-based warehouses offering a diverse range of products, including groceries, appliances, apparel, and household goods, along with additional services such as fuel, pharmacies, and e-commerce [2] - Jim Cramer views Costco as a "great long-term hold," suggesting a gradual purchasing strategy rather than buying all shares at once, reflecting the company's consistent valuation over time [2] Group 2 - Despite the potential of Costco as an investment, there are AI stocks identified that may offer greater upside potential and lower downside risk, indicating a competitive investment landscape [2]