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Costco (COST) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Costco (COST - Free Report) closed at $289.89, marking a -0.28% move from the previous day. This change lagged the S&P 500's 0.29% gain on the day. Meanwhile, the Dow gained 0.17%, and the Nasdaq, a tech-heavy index, added 0.3%.

Coming into today, shares of the warehouse club operator had gained 8.41% in the past month. In that same time, the Retail-Wholesale sector gained 5.23%, while the S&P 500 gained 2.99%.

Investors will be hoping for strength from COST as it approaches its next earnings release, which is expected to be October 3, 2019. In that report, analysts expect COST to post earnings of $2.54 per share. This would mark year-over-year growth of 7.63%. Our most recent consensus estimate is calling for quarterly revenue of $47.22 billion, up 6.32% from the year-ago period.

Investors should also note any recent changes to analyst estimates for COST. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.04% higher. COST currently has a Zacks Rank of #3 (Hold).

Investors should also note COST's current valuation metrics, including its Forward P/E ratio of 34.16. This represents a premium compared to its industry's average Forward P/E of 22.87.

It is also worth noting that COST currently has a PEG ratio of 3.85. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 2.17 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 26, which puts it in the top 11% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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