Costco (COST) has been hammered. 

Shares of the membership club retailer have plunged 13% to $158.82 inside of a month, as investors have grown worried about a world where Amazon (AMZN) owns organic food pioneer Whole Foods (WFM) . Costco's market cap has fallen a shade more than $9 billion.

The more one looks at the grocery store landscape, the stock market has good reason to be concerned about Costco's future. 

Amazon's $13.7 billion deal for Whole Foods is likely to spur pressured food prices across the board, over time. This is the last thing Costco needs with its already razor-thin profit margins on bulk mustard and diapers. Walmart (WMT) is likely to ramp up its price-cutting efforts in response, as is Kroger (KR) . After awhile, there is an all-out food price war in the grocery aisles.

As Amazon's Prime continues to become a dominant force in society, and is now entering the food business, too, people may question the need to have a Costco card.

Top this off with millennials living in smaller houses than their parents, and one has to wonder how Costco will fit into their plans.

But not everyone on Wall Street shares the doom and gloom case on Costco. 

"Costco's business model remains intact with healthy membership growth and strong renewal rates. In addition, prior year comparable sales comparisons remain favorable as we enter FY18 and earnings growth should begin to benefit from membership fee increases," Raymond James analysts wrote recently. "So, while Amazon's agreement to buy Whole Foods, when consummated, will add a new dimension to the grocery business, it does not materially impact Costco's unique business model, and we would be buyers on Costco's recent weakness."

Buyer beware.

Costco's shares fell 0.6% to $157.08 by Thursday's close.

Editor's Pick: This article was originally published on July 5, 2017. 

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