
NASDAQ:COST
This summary was created by AI, based on 52 opinions in the last 12 months.
Costco Wholesale Corporation has garnered significant acclaim for its strong business model, loyal customer base, and consistent growth prospects. Experts highlight Costco's ability to expand its store count and leverage its membership model to maintain steady revenue streams. However, concerns about the stock's high price-to-earnings (PE) ratio, which many analysts suggest hovers around the mid-40s to 50s, are prevalent. Despite its robust performance and favorable market position, the stock is considered to be overvalued, leading to mixed sentiments among investors regarding entry points and potential pullbacks. Overall, while there is appreciation for Costco's operations, the prevailing valuation remains a frequent topic of discussion, causing some investors to advocate for caution.
COST-Q vs. FB-Q. COST-Q is a great retailer which he used to own. You don't need to be looking for a reason to sell it. FB-Q is still in the early innings of monetizing the electronic advertising market and getting more and more into E commerce. He thinks there is more upside in FB-Q. You can't go wrong either way.
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)