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Friday, November 27, 2020

The Unprecedented Rise of Costco Wholesale Corporation (NASDAQ:COST)

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Costco Wholesale Corporation (COST) shares are trading at higher $344.61 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $340.58.

To add more color to this target, the company’s high over the last year is $345.12 and the low is $271.28. Over the last 52 weeks, COST is up 23.11% while the S&P 500 is up 16.12%%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, COST reported a profit of $5.02 billion. Costco Wholesale Corporation also saw revenues increase to $37.27 billion. In addition, COST has free cash flow of $2.66 billion as of 05-2020. The company’s EBITDA came in at $1.56 billion which compares well with its peers.

COST booked profit margins of 2.30%, its Return on Equity (ROE) is 23.00%, and its Return on Assets is 7.50%. All told, it is clear that, COST needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. COST has a short ratio of 1.35 and outstanding shares of 442.32M.

Company Outlook

COST has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 1.7 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 8.46. Costco Wholesale Corporation COST also noted assets of $51.73 billion at the end of the last quarter. Investors should also keep an eye on sector updates as COST has historically followed its peers on positive news.

All told, Costco Wholesale Corporation COST has strung together solid data and demonstrated underlying fundamentals. At its current valuation, COST represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Costco Wholesale Corporation COST is now commanding a market cap of 150.50B and a float of 440.54M. COST is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of COST stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in COST, either long or short, and we have not been compensated for this article.

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