Costco (COST) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Individual investors often f ...

 Consumer staples firms produce the essential goods and services that typically benefit from consistent overall demand. It is that consistent performance that generally makes consumer staples stocks recession-resistant.In turn, that makes shares in the sector strong buy and hold choices because they tend to perform well over the long run. People need to eat, take care of personal hygiene and maintain their households regardless of the macroeconomic situation at any given point. The result is that consumer s ...

Here's a look at Costco's stock after its recent membership hike announcement.Costco Wholesale (COST -0.25%) members in the U.S. and Canada will soon pay more for their memberships after the company recently announced a price hike. The news comes on the heels of an outstanding 2024 for the stock, which is up approximately 25% year to date. Given the rise in Costco stock, it's worth digging into its recent financials, the details of the price hike, and its valuation to determine whether it's a buy, sell, or ...

Costco Wholesale Corp. (COST, Financial) has been an investing darling for as long as I can remember. It has also been a darling for shoppers as they have some of the strongest brand loyalty in the market. I know firsthand as I am a card-carrying member of its club and happily pay the membership fee every year to shop in its warehouses. No one can beat its rotisserie chickens, toilet paper and giant box of spinach.This is not a shopping blog, so let's jump into the company and stock. Costco has been perform ...

Costco's latest membership fee hike doesn't even come close to making up for inflation. Should they have done more?Costco (COST 0.34%) recently announced a $5 annual price increase to its base membership level. This is the first time the warehouse giant has increased its membership cost since 2017. Given the recent effects of inflation, there's a solid argument to be made that Costco should have done more, and here's what longtime Fool.com contributor and Costco shareholder Risk Munarriz has to say about it ...

Costco is looking toward technology to improve the customer experience at its brick-and-mortar and online stores without significantly changing the retail giant’s proven business strategy, the company’s chief financial officer said.Costco CFO Gary Millerchip was taking questions from analysts during Costco’s third quarter earnings call earlier this year when he was asked what the company thought about being “more aggressive” with the evolution of its retail business model by deploying more technology in its ...

Stock Splits Overview - Stock splits remain a major theme in the market this year, with companies like Deckers Outdoor and Broadcom recently announcing splits [1] - Stock splits make shares more affordable for investors, particularly retail investors, without changing the valuation or fundamentals of the stock [1] - Recent examples include Walmart, Nvidia, and Chipotle Mexican Grill, which have split their stocks to attract more investors [1] Costco Wholesale (COST) - Costco's stock has risen 44% over the last 12 months, reaching $815 per share, with a high valuation of 46 times future earnings estimates [2] - The company has not split its stock in 24 years, and the current high share price may prompt management to consider a split [2] - Costco's stock has risen nearly 200% in the last five years, making it a long-term winner for investors [3] Super Micro Computer (SMCI) - Super Micro Computer's stock is trading at nearly $700, more than double its price at the start of the year, with a P/E ratio of 39 [4] - The stock has fallen 43% from its 52-week high of $1,229, but a stock split could make it more attractive to retail investors [5] - Year-to-date, Super Micro Computer's stock has risen 148%, driven by demand for its AI servers [5] ServiceNow (NOW) - ServiceNow's stock surged nearly 15% after strong Q2 financial results, driven by AI demand, and is now trading near a 52-week high of $850 [6] - The stock's valuation is sky-high at about 90 times future earnings estimates, and it has risen nearly 3,000% since its 2012 IPO [6] - With the share price approaching $1,000, a stock split may be considered, especially as the company continues to benefit from the AI trade [6]

Core Viewpoint - Costco has demonstrated significant historical growth and has potential for future opportunities, but current stock prices may not justify an investment at this time [1][4]. Group 1: Company Performance - Costco has achieved a remarkable 1,700% increase in share price since the year 2000, leading to a total return of 2,600% when including dividends [1]. - Membership fee revenue reached $1.1 billion in the fiscal third quarter of 2024, contributing approximately 50% to the company's operating income [2]. - Sales have increased by 650% since 2000, while earnings have risen nearly 950%, indicating a strong business model [3]. Group 2: Valuation Concerns - Costco's stock is currently near all-time highs, with a price-to-earnings (P/E) ratio of nearly 52, which is significantly above its five-year average of about 40 [5]. - The elevated P/E ratio is reminiscent of the late 1990s, suggesting that investors may be pricing in excessive optimism regarding future earnings growth [6]. - It is advised to place Costco on a wish list rather than an immediate buy list, with a recommendation to consider purchasing if the P/E ratio drops to its five-year average or lower [7].

Stock Splits and Market Impact - Stock splits generate excitement among investors, leading to increased market cap despite not inherently increasing company value [1] - Companies like Amazon, Chipotle, Nvidia, and Broadcom have seen increased investor interest following stock splits [1] Costco (COST) Performance - Costco is a potential candidate for a stock split, trading above $800/share, with shares up 29% year-to-date and nearly tripling over the past five years [2] - The company reported a 6.9% year-over-year increase in net sales for the first 44 weeks and a 5.3% increase in comparable sales for June [3] Meta Platforms (META) Growth - Meta Platforms has seen a 38% increase in shares year-to-date and a 140% increase over the past five years, with revenue up 27% year-over-year and net income up 117% year-over-year [4][5] - The company has focused on shareholder returns through stock buybacks and dividends, indicating a potential for a stock split [5] Microsoft (MSFT) Financials - Microsoft has a history of stock splits, with the last occurring over 20 years ago, and currently trades above $400/share, up 18% year-to-date and 220% over the past five years [6] - The company reported a 17% year-over-year revenue growth in Q3 of fiscal 2024, with cloud revenue growing by 23% to reach $35.1 billion [6][7] - Microsoft returned $8.4 billion to shareholders through stock buybacks and dividends in the latest quarter [7]

Core Viewpoint - Costco Wholesale Corporation has shown remarkable stock performance and operational success over the past thirty years, with a stock price increase of over 2,500% since 2003, making it a strong candidate for investment consideration [1]. Leadership and Membership Fees - A new CEO, Ron Vachris, will take over from Craig Jelinek effective January 1, 2024, ensuring continuity as Vachris has been with the company for over 40 years and worked closely with Jelinek for nearly two years [2]. - Membership fees will increase for the first time since 2017, with annual prices rising by $5 and $10 for the two membership levels, which could potentially disrupt operations if membership declines, although a significant loss of members is deemed unlikely due to high customer loyalty [3]. Operating Performance - For the third quarter of the 2024 fiscal year, Costco reported a 9.1% increase in net sales to $4.79 billion and a 29% increase in net income to $1.68 billion, with comparable location sales up 6.5% on an adjusted basis, indicating strong customer reliance under new leadership [4]. Growth Opportunities - Future growth may be limited in the U.S. due to competition from Walmart, Sam's Club, Target, and Amazon, making substantial increases in new memberships unlikely in the coming years [5]. - The recent membership fee increases are expected to enhance cash flows, as Costco has a 90% member renewal rate, suggesting minimal impact on membership numbers [5]. - International expansion is a key focus, with 10 out of 23 new locations opened in the 2023 fiscal year being outside the U.S., indicating a cautious approach to growth that could benefit investors [6][7]. Valuation and Investment Appeal - Costco appears fully valued based on its current business operations, with a Price-to-Earnings ratio of 36.1 and a Price-to-Free Cash Flow ratio of 67.0, alongside a dividend yield of 0.71% that is well covered, making it attractive for income investors [8]. - Growth investors may consider adding shares, as the dividend provides a reward while waiting for international membership growth [8].