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NASDAQ:COST
This summary was created by AI, based on 51 opinions in the last 12 months.
Costco Wholesale Corporation, with a stock symbol of COST-Q, is recognized for its robust business model and consistent double-digit growth, making it a favorable choice for long-term investors. Despite its premium valuation, trading at 40-54x PE, many experts highlight Costco's expanding store count and the substantial potential of its membership model. The company benefits from a loyal customer base, particularly through its private-label Kirkland brand, and exhibits strong sales growth, notably in e-commerce and delivery channels. Some experts express concern over high valuations and market dynamics, advocating for patience and the possibility of better entry points, while others reaffirm their commitment to holding the stock long-term due to its resilience and track record of compounded returns. Overall, Costco is viewed as one of the most reliable businesses in global retail, with the potential for continued market share expansion.
Sell Costco to buy DLTR? Costco is very well run, but their challenge is always growth. And their forward PE is 35x, which is high. Whereas DLTR trades at 17x, driven by growth and expansion. Long-term, DLTR has earnings growth and multiple expansion and a better total return over 5-7 years than Costco.
Biggest advantage is in the membership structure. Membership revenue is a big part of their revenues. Comparable to Amazon Prime customers. Very large average customer basket when they leave the store. Growing online footprint. Increasingly will be able to sell furniture and appliances. International growth prospects like in China. 34x PE multiple. Not cheap but good capital allocators with growth. (Analysts’ price target is $405.73)
Last week, analyst Larry Williams advised buying Walmart and Costco before Easter, because both tend to do well this time of year. the stocks moved up, though remember that these are "essential retailers" so their move up came at the expense of the non-essential stores. We're robbing Peter to pay Paul. Both have been punished recently for being unfashionable lockdown stocks and both deserve to be your in your portfolio.