Costco Wholesale Corporation
Find Ratings ReportsCOSTCO WHOLESALE CORP's gross profit margin for the second quarter of its fiscal year 2024 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its subsector. COSTCO WHOLESALE CORP has very weak liquidity. Currently, the Quick Ratio is 0.38 which clearly shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.
During the same period, stockholders' equity ("net worth") has decreased by 8.92% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.
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Income Statement | Q2 FY24 | Q2 FY23 |
---|---|---|
Net Sales ($mil) | 58442.0 | 55266.0 |
EBITDA ($mil) | 2576.0 | 2373.0 |
EBIT ($mil) | 2062.0 | 1903.0 |
Net Income ($mil) | 1743.0 | 1466.0 |
Balance Sheet | Q2 FY24 | Q2 FY23 |
---|---|---|
Cash & Equiv. ($mil) | 10321.0 | 13705.0 |
Total Assets ($mil) | 66323.0 | 66848.0 |
Total Debt ($mil) | 9433.0 | 9139.0 |
Equity ($mil) | 20760.0 | 22794.0 |
Profitability | Q2 FY24 | Q2 FY23 |
---|---|---|
Gross Profit Margin | 13.37 | 13.23 |
EBITDA Margin | 4.4 | 4.29 |
Operating Margin | 3.53 | 3.44 |
Sales Turnover | 3.75 | 3.51 |
Return on Assets | 10.24 | 9.05 |
Return on Equity | 32.73 | 26.55 |
Debt | Q2 FY24 | Q2 FY23 |
---|---|---|
Current Ratio | 0.93 | 1.06 |
Debt/Capital | 0.31 | 0.29 |
Interest Expense | 41.0 | 34.0 |
Interest Coverage | 50.29 | 55.97 |
Share Data | Q2 FY24 | Q2 FY23 |
---|---|---|
Shares outstanding (mil) | 443.55 | 443.55 |
Div / share | 16.02 | 0.9 |
EPS | 3.92 | 3.3 |
Book value / share | 46.8 | 51.39 |
Institutional Own % | n/a | n/a |
Avg Daily Volume | 2392716.0 | 1930342.0 |
BUY. COSTCO WHOLESALE CORP's P/E ratio indicates a discount compared to an average of 52.74 for the General Merchandise Retailers subsector and a significant premium compared to the S&P 500 average of 27.95. For additional comparison, its price-to-book ratio of 15.64 indicates a significant premium versus the S&P 500 average of 4.68 and a significant premium versus the subsector average of 9.46. The price-to-sales ratio is well below both the S&P 500 average and the subsector average, indicating a discount. The valuation analysis reveals that, COSTCO WHOLESALE CORP seems to be trading at a discount to investment alternatives.
Price/Earnings |
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Price/Cash Flow |
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COST 47.87 | Peers 52.74 | COST 30.44 | Peers 20.52 | |||||||||||||||||||||
Average. An average P/E ratio can signify an subsector neutral price for a stock and an average growth expectation. COST is trading at a valuation on par with its peers. |
Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. COST is trading at a significant premium to its peers. |
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Price/Projected Earnings |
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Price to Earnings/Growth |
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COST 42.33 | Peers 31.66 | COST 3.48 | Peers 1.88 | |||||||||||||||||||||
Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations. COST is trading at a significant premium to its peers. |
Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. COST trades at a significant premium to its peers. |
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Price/Book |
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Earnings Growth |
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COST 15.64 | Peers 9.46 | COST 12.34 | Peers 759.84 | |||||||||||||||||||||
Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. COST is trading at a significant premium to its peers. |
Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. However, COST is expected to significantly trail its peers on the basis of its earnings growth rate. |
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Price/Sales |
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Sales Growth |
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COST 1.30 | Peers 2.53 | COST 6.15 | Peers 10.39 | |||||||||||||||||||||
Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. COST is trading at a significant discount to its subsector on this measurement. |
Lower. A sales growth rate that trails the subsector implies that a company is losing market share. COST significantly trails its peers on the basis of sales growth. |
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