Stan Wong Costco Wholesale Corporation COST-Q SELL Apr 10, 2025

A great company based on a fantastic model with nearly all profits covered by membership fees, but trades in the mid-40x PE, which is too high for a retailer, even after this pullback. Great company, but not a great stock.

Profitability is improving; expanding due to e-commerce growth, Kirkland signature, and ad revenue. Reputable brand. Opens 25-30 stores a year. Adding footprint in China. Likes the stability and steady growth. Performs well even in uncertain markets. Impressive membership renewal rate over 90%, and that recurring revenue is a major strength. Sales are still growing from both price and traffic increases. Yield is 0.51%.

Profitability is improving; expanding due to e-commerce growth, Kirkland signature, and ad revenue. Reputable brand. Opens 25-30 stores a year. Adding footprint in China. Likes the stability and steady growth. Performs well even in uncertain markets. Impressive membership renewal rate over 90%, and that recurring revenue is a major strength. Sales are still growing from both price and traffic increases. Yield is 0.51%.

Its stability can weather volatility long term. Expecting 9% EPS growth in both 2025 and 2026. Fundamental score is 9/10.

They boast profits and growth, and shares are -12% in the past month, making this a buy. No, it's not rolling over. Buy some now, and buy some next week.

Managed to combine recurring revenue (membership fees) with traditional retail. Business model is still the best in the retail space. Big push toward lower-cost merchandisers. Second to none in its ability to not only survive, but thrive, in what could be a difficult economic environment. Yield is 0.48%.

Any time it opens up a store, it's successful. Model is easy to replicate in other countries. Exceptional customer loyalty. Produce will probably be impacted less by tariffs, as it's sourced locally; hardware goods may be impacted.

They will survive this tariff war, because they can source cheap, bulk products.

Great company and franchise, but valuation got expensive.

It reports tomorrow. No matter how good the quarter will be, it will sell off as it always does after a quarter. Buy after the report.