Why Costco Wholesale Stock Remains a Strong Buy for Long-term Investors
4 Reasons to Remain Bullish on Costco Wholesale Stock This Year
If you're in for the long haul, a stock's valuation based on its recent earnings shouldn't be all that important. Costco Wholesale (NASDAQ: COST) is trading at close to 50 times its trailing earnings. Although not near its 52-week high anymore, the stock still looks expensive given its level of profitability. During the past 12 months, Costco shares surged 50%, soaring past the S&P 500 and its 32% gains over that time frame.
- The business is still showing strong member growth: With a high renewal rate, Costco continues to attract new members consistently, reflecting positive growth prospects.
- Gross margin improved: Costco's resilient business model is evidenced by its enhanced gross margin, indicating the potential for increased profitability.
- Costco is opening more stores: Expansion plans in both the U.S. and international markets, especially in China, showcase long-term growth opportunities for the company.
- The e-commerce business is another big opportunity for Costco: Strong e-commerce performance and the integration of Apple Pay indicate promising growth potential in online sales.
Costco's stock comes at a premium, but it presents a solid investment opportunity for long-term investors looking for growth potential.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.