NasdaqGS:COST

Stock Analysis Report

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Executive Summary

Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan. More Details


Snowflake Analysis

Excellent balance sheet with proven track record.


Similar Companies

Share Price & News

How has Costco Wholesale's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: COST has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.9%

COST

-3.0%

US Consumer Retailing

-4.6%

US Market


1 Year Return

22.8%

COST

13.6%

US Consumer Retailing

11.5%

US Market

Return vs Industry: COST exceeded the US Consumer Retailing industry which returned 13.6% over the past year.

Return vs Market: COST exceeded the US Market which returned 11.5% over the past year.


Shareholder returns

COSTIndustryMarket
7 Day-2.9%-3.0%-4.6%
30 Day3.6%1.9%-0.9%
90 Day12.1%6.6%2.2%
1 Year23.6%22.8%15.4%13.6%14.0%11.5%
3 Year127.9%121.3%58.2%49.4%34.5%25.6%
5 Year156.1%133.5%91.0%71.7%73.0%53.6%

Price Volatility Vs. Market

How volatile is Costco Wholesale's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Costco Wholesale undervalued compared to its fair value and its price relative to the market?

40.34x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: COST ($364.96) is trading above our estimate of fair value ($261.58)

Significantly Below Fair Value: COST is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: COST is poor value based on its PE Ratio (40.3x) compared to the US Consumer Retailing industry average (14.1x).

PE vs Market: COST is poor value based on its PE Ratio (40.3x) compared to the US market (18.1x).


Price to Earnings Growth Ratio

PEG Ratio: COST is poor value based on its PEG Ratio (4.7x)


Price to Book Ratio

PB vs Industry: COST is overvalued based on its PB Ratio (8.8x) compared to the US Consumer Retailing industry average (1.5x).


Next Steps

Future Growth

How is Costco Wholesale forecast to perform in the next 1 to 3 years based on estimates from 25 analysts?

8.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: COST's forecast earnings growth (8.7% per year) is above the savings rate (2.2%).

Earnings vs Market: COST's earnings (8.7% per year) are forecast to grow slower than the US market (22% per year).

High Growth Earnings: COST's earnings are forecast to grow, but not significantly.

Revenue vs Market: COST's revenue (6.9% per year) is forecast to grow slower than the US market (10% per year).

High Growth Revenue: COST's revenue (6.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: COST's Return on Equity is forecast to be high in 3 years time (20.5%)


Next Steps

Past Performance

How has Costco Wholesale performed over the past 5 years?

12.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: COST has high quality earnings.

Growing Profit Margin: COST's current net profit margins (2.4%) are higher than last year (2.4%).


Past Earnings Growth Analysis

Earnings Trend: COST's earnings have grown by 12.4% per year over the past 5 years.

Accelerating Growth: COST's earnings growth over the past year (9.4%) is below its 5-year average (12.4% per year).

Earnings vs Industry: COST earnings growth over the past year (9.4%) underperformed the Consumer Retailing industry 52.6%.


Return on Equity

High ROE: COST's Return on Equity (21.7%) is considered high.


Next Steps

Financial Health

How is Costco Wholesale's financial position?


Financial Position Analysis

Short Term Liabilities: COST's short term assets ($28.1B) exceed its short term liabilities ($24.8B).

Long Term Liabilities: COST's short term assets ($28.1B) exceed its long term liabilities ($12.0B).


Debt to Equity History and Analysis

Debt Level: COST's debt to equity ratio (40.7%) is considered high.

Reducing Debt: COST's debt to equity ratio has reduced from 56.5% to 40.7% over the past 5 years.

Debt Coverage: COST's debt is well covered by operating cash flow (116.5%).

Interest Coverage: COST's interest payments on its debt are well covered by EBIT (84.8x coverage).


Balance Sheet


Next Steps

Dividend

What is Costco Wholesale current dividend yield, its reliability and sustainability?

0.77%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: COST's dividend (0.77%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.71%).

High Dividend: COST's dividend (0.77%) is low compared to the top 25% of dividend payers in the US market (4.86%).


Stability and Growth of Payments

Stable Dividend: COST is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: COST is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: COST is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of COST's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

20.9yrs

Average management tenure


CEO

W. Jelinek (68 yo)

8.75yrs

Tenure

US$8,016,200

Compensation

Mr. W. Craig Jelinek has been the President and Chief Executive Officer of Costco Wholesale Corporation since February 2010 and January 1, 2012 respectively and served as its Executive Vice President of Me ...


CEO Compensation Analysis

Compensation vs Market: W.'s total compensation ($USD8.02M) is about average for companies of similar size in the US market ($USD11.21M).

Compensation vs Earnings: W.'s compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
W. Jelinek
President8.75yrsUS$8.02m0.075%
$ 121.3m
Richard Galanti
Executive VP25.75yrsUS$4.44m0.0076%
$ 12.3m
Paul Moulton
Executive VP & Chief Information Officerno dataUS$4.09m0.0074%
$ 11.9m
Joseph Portera
Executive VP26.17yrsUS$4.15m0.0027%
$ 4.4m
James Murphy
Executive VP & COO of International Division16.08yrsUS$4.04m0.0090%
$ 14.5m
Patrick Callans
Executive Vice President of Administration1.75yrsno data0.014%
$ 22.6m
Robert Nelson
Senior Vice President of Financial Planning & Investor Relationsno datano datano data
John Sullivan
Senior VPno datano datano data
Richard Chavez
Senior Vice President of Costco Wholesale Industries & Business Developmentno datano datano data
Paul Latham
Senior Vice President of Membershipno datano datano data
John Thelan
Senior Vice President of Depots & Trafficno datano datano data
Timothy Rose
Executive Vice President of Ancillary Businesses25.75yrsno data0.0069%
$ 11.2m

20.9yrs

Average Tenure

68yo

Average Age

Experienced Management: COST's management team is seasoned and experienced (20.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
W. Jelinek
President8.75yrsUS$8.02m0.075%
$ 121.3m
Richard Galanti
Executive VP25.75yrsUS$4.44m0.0076%
$ 12.3m
Richard Libenson
Consultant and Director Emeritus3.75yrsUS$689.17k0.018%
$ 28.6m
Jeffrey Raikes
Independent Director11.83yrsUS$305.07k0.0075%
$ 12.0m
Kenneth Denman
Independent Director3.58yrsUS$313.07k0.00078%
$ 1.3m
Susan Decker
Independent Director16yrsUS$308.07k0.0047%
$ 7.6m
Mary Wilderotter
Independent Director5yrsUS$305.07k0.0016%
$ 2.6m
Charles Munger
Independent Director23.75yrsUS$308.07k0.042%
$ 67.3m
John Stanton
Independent Director5yrsUS$300.07k0.0047%
$ 7.5m
Hamilton James
Independent Chairman of the Board3.17yrsUS$298.07k0.0088%
$ 14.2m
Sarah Margaret Jewell
Independent Director0.75yrno data0.000050%
$ 80.5k

5.0yrs

Average Tenure

65yo

Average Age

Experienced Board: COST's board of directors are considered experienced (5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: COST insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Costco Wholesale Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Costco Wholesale Corporation
  • Ticker: COST
  • Exchange: NasdaqGS
  • Founded: 1976
  • Industry: Hypermarkets and Super Centers
  • Sector: Consumer Retailing
  • Market Cap: US$161.031b
  • Shares outstanding: 441.23m
  • Website: https://www.costco.com

Number of Employees


Location

  • Costco Wholesale Corporation
  • 999 Lake Drive
  • Issaquah
  • Washington
  • 98027
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
COSTNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDOct 1993
CTODB (Deutsche Boerse AG)YesCommon StockDEEUROct 1993
COST *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNOct 1993
COSTSNSE (Santiago Stock Exchange)YesCommon StockCLUSDOct 1993
0I47LSE (London Stock Exchange)YesCommon StockGBUSDOct 1993
COSTWBAG (Wiener Boerse AG)YesCommon StockATEUROct 1993
CTOETLX (Eurotlx)YesCommon StockITEUROct 1993
COSTBASE (Buenos Aires Stock Exchange)CEDEAR EACH 12 REP 1ARARSApr 2013
COWC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 40 REP 1 COMBRBRLApr 2016

Biography

Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australi ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/29 00:43
End of Day Share Price2020/10/28 00:00
Earnings2020/08/30
Annual Earnings2020/08/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.