In the latest trading session, Costco (COST) closed at $340.91, marking a -0.7% move from the previous day. This move lagged the S&P 500’s daily gain of 0.06%. Elsewhere, the Dow gained 0.17%, while the tech-heavy Nasdaq lost 0.87%.
Coming into today, shares of the warehouse club operator had gained 5.46% in the past month. In that same time, the Retail-Wholesale sector gained 7.55%, while the S&P 500 gained 5.48%.
Investors will be hoping for strength from COST as it approaches its next earnings release. The company is expected to report EPS of $2.71, up 0.74% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $50.79 billion, up 6.93% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $8.51 per share and revenue of $164.15 billion, which would represent changes of +3.91% and +7.49%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for COST. 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.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
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. The Zacks Consensus EPS estimate has moved 0.73% higher within the past month. COST is currently sporting a Zacks Rank of #3 (Hold).
Investors should also note COST’s current valuation metrics, including its Forward P/E ratio of 40.36. This represents a premium compared to its industry’s average Forward P/E of 26.03.
It is also worth noting that COST currently has a PEG ratio of 4.81. 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. COST’s industry had an average PEG ratio of 4.3 as of yesterday’s close.
The Retail – Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 185, putting it in the bottom 28% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.