Costco (COST) Dips More Than Broader Markets: What You Should Know Edit My Quotes

Costco (COST) closed the most recent trading day at $515.89, moving -0.75% from the previous trading session. This change lagged the S&P 500's 0.37% loss on the day.

Coming into today, shares of the warehouse club operator had lost 3.06% in the past month. In that same time, the Retail-Wholesale sector lost 6.95%, while the S&P 500 lost 6.01%.

Costco will be looking to display strength as it nears its next earnings release, which is expected to be March 3, 2022. On that day, Costco is projected to report earnings of $2.66 per share, which would represent year-over-year growth of 24.3%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $51.05 billion, up 14.03% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $12.66 per share and revenue of $218.63 billion, which would represent changes of +14.26% and +11.59%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Costco. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.96% higher. Costco is currently a Zacks Rank #2 (Buy).

Investors should also note Costco's current valuation metrics, including its Forward P/E ratio of 41.05. Its industry sports an average Forward P/E of 18.23, so we one might conclude that Costco is trading at a premium comparatively.

We can also see that COST currently has a PEG ratio of 4.68. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 1.5 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 227, which puts it in the bottom 11% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.