Costco Stock Up 13% In A Month, Room To Run More?
[Note: Costco’s FY’21 ended on August 29, 2o21]
Costco (NASDAQ: COST) stock, the second largest warehouse club operator in the U.S. behind only Walmart’s Sam’s Club, has increased by 13% over the last twenty-one trading days (one month) and currently stands at around $516. Costco offers high-quality goods at bargain prices that are appealing to consumers. This makes it highly relevant during the current times of record high inflation and explains the retailer’s higher growth in sales than usual since the pandemic’s onset. In its fiscal third quarter (ended May 8), Costco generated net sales of $51.6 billion up 16.3% year-over-year (y-o-y). When compared with Costco’s compound annual growth rate of 8.2% in the past decade, its most recent quarter’s growth rate of 16.3% is quite impressive. The company’s Q3 sales were fueled by an increase in shopping frequency of 5.6% and a rise in average transaction total of 7.6%. Also, Costco’s membership households grew to 64.4 million, up 6% higher than last year in FYQ3. Additionally, its renewal rate in the U.S. grew to 92.3% and stood at 90% worldwide – displaying the retailer’s ability to maintain and attract new customers to its warehouses.
During the month of June, Costco’s U.S. comp sales rose 21.5% compared to last year (including the impact of foreign exchange and gasoline prices). There was an additional shopping day in the U.S. compared to last year due to the timing of Independence Day, which added an additional 3% of growth to the results. In addition, the retailer also experienced a 20.4% sales increase in the month of June. Overall, Costco’s growth is accelerating at a time when competitors such as Walmart (NYSE: WMT) and Target (NYSE: TGT) are slowing down.
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Now, is COST stock poised to decline in the short term or are gains looking more likely? Based on our machine learning analysis of trends in the stock price over the last ten years, there is an 83% chance of a rise in COST stock over the next month (twenty-one trading days). See our analysis of COST’s Stock Chance Of Rise for more details.
Calculation of ‘Event Probability’ and ‘Chance of rising’ using last ten years’ data
[1] Returns of 3.5% or higher over a five-day period on 326 occasions out of 2515 (13%); Stock rose in the next five days in 190 of these 326 instances (58%)
[2] Returns of 6.3% or higher over a ten-day period on 174 occasions out of 2515 (7%); Stock rose in the next ten days in 88 of these 174 instances (51%)
[3] Returns of 13% or higher over a twenty-one-day period on 23 occasions out of 2514 (<1%); Stock rose in the next twenty-one days in 19 of these 23 instances (83%)
It is helpful to see how its peers stack up. COST Peers shows how Costco stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.
With inflation rising and the Fed raising interest rates, Costco has fallen 8% this year. Can it drop more? See how low can COST stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.
What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.
| Returns | Jul 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
| COST Return | 8% | -9% | 222% |
| S&P 500 Return | 1% | -20% | 71% |
| Trefis Multi-Strategy Portfolio | 3% | -21% | 214% |
[1] Month-to-date and year-to-date as of 7/19/2022
[2] Cumulative total returns since the end of 2016
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