Costco Wholesale logged a -1.6% change during today's evening session, and is now trading at a price of $848.31 per share.
Costco Wholesale returned gains of 62.1% last year, with its stock price reaching a high of $873.96 and a low of $521.26. Over the same period, the stock outperformed the S&P 500 index by 35.8%. More recently, the company's 50-day average price was $783.79. Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, Mexico, Japan, the United Kingdom, Korea, Australia, Taiwan, China, Spain, France, Iceland, New Zealand, and Sweden. Based in Issaquah, WA, the Large-Cap Consumer Discretionary company has 316,000 full time employees. Costco Wholesale has offered a 0.5% dividend yield over the last 12 months.
Strong Revenue Growth but an Average Current Ratio:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $141,576 | $152,703 | $166,761 | $195,929 | $226,954 | $242,290 |
| Operating Margins | 3% | 3% | 3% | 3% | 3% | 3% |
| Net Margins | 2% | 2% | 2% | 3% | 3% | 3% |
| Net Income (M) | $3,134 | $3,659 | $4,002 | $5,007 | $5,844 | $6,292 |
| Net Interest Expense (M) | $159 | $150 | $160 | $171 | $158 | $160 |
| Depreciation & Amort. (M) | $1,437 | $1,492 | $1,645 | $2,601 | $2,768 | $2,524 |
| Diluted Shares (M) | 443 | 444 | 444 | 445 | 445 | 444 |
| Earnings Per Share | $7.09 | $8.26 | $9.02 | $11.27 | $13.14 | $14.16 |
| EPS Growth | n/a | 16.5% | 9.2% | 24.94% | 16.59% | 7.76% |
| Avg. Price | $195.38 | $247.91 | $315.32 | $414.98 | $510.74 | $848.31 |
| P/E Ratio | 27.33 | 29.8 | 34.84 | 36.72 | 38.78 | 59.82 |
| Free Cash Flow (M) | $4,920 | $5,316 | $8,772 | $6,589 | $5,382 | $8,298 |
| CAPEX (M) | $2,969 | $2,998 | $2,810 | $5,054 | $5,669 | $5,380 |
| EV / EBITDA | 15.52 | 17.97 | 19.88 | 19.85 | 21.62 | 34.72 |
| Total Debt (M) | $13,001 | $11,957 | $15,186 | $14,196 | $13,102 | $10,754 |
| Net Debt / EBITDA | 1.05 | 0.47 | 0.23 | 0.16 | 0.21 | -0.59 |
| Current Ratio | 1.02 | 1.01 | 0.98 | 1.02 | 1.03 | 1.09 |
Costco Wholesale has rapidly growing revenues and increasing reinvestment in the business and generally positive cash flows. Additionally, the company's financial statements display a strong EPS growth trend and healthy leverage levels. However, the firm has weak operating margins with a stable trend. Finally, we note that Costco Wholesale has just enough current assets to cover current liabilities, as shown by its current ratio of 1.09.
Costco Wholesale Has Elevated P/B and P/E Ratios:
Costco Wholesale has a trailing twelve month P/E ratio of 48.7, compared to an average of 22.06 for the Consumer Discretionary sector. Based on its EPS guidance of $17.67, the company has a forward P/E ratio of 44.4. The 13.9% compound average growth rate of Costco Wholesale's historical and projected earnings per share yields a PEG ratio of 3.49. This suggests that these shares are overvalued. Furthermore, Costco Wholesale is likely overvalued compared to the book value of its equity, since its P/B ratio of 17.28 is higher than the sector average of 3.18. The company's shares are currently trading 519.6% below their Graham number. Overall, Costco Wholesale's lofty valuation in terms of earnings and assets is to some extent attenuated by its strong cash flow trend and reasonable levels of debt.
There's an Analyst Consensus of Little Upside Potential for Costco Wholesale:
The 29 analysts following Costco Wholesale have set target prices ranging from $675.0 to $940.0 per share, for an average of $841.75 with a buy rating. The company is trading 0.8% away from its average target price, indicating that there is an analyst consensus of little upside potential.
Costco Wholesale has a very low short interest because 1.5% of the company's shares are sold short. Institutions own 71.9% of the company's shares, and the insider ownership rate stands at 0.19%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $34,639,780,160.
