Is price-to-earnings ratio of 38.37 for Costco Wholesale Corporation (NASDAQ:COST) Stock digestible?


Deutsche Bank raised the price target for the Costco Wholesale Corporation (NASDAQ:COST) stock from “a Hold” to “a Buy”. The rating was released on July 14, 2022, according to finviz. We previously noted in another research note published on March 04, 2022 by Truist that reiterated the stock to a Buy with a price target of $603 for COST stock. The research report from Telsey Advisory Group has reiterated the stock to Outperform, with a price target set at $615. The stock was reiterated by Evercore ISI, who disclosed in a research note on March 04, 2022, to Outperform and set the price objective to $565. In their research brief published March 04, 2022, BMO Capital Markets analysts reiterated the Costco Wholesale Corporation stock to Outperform with a price target of $580.

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The latest trade, Performances and Moving Averages give us the following Picture

The share price of Costco Wholesale Corporation (NASDAQ:COST) dipped -1.20% to close Thursday’s market session at $487.17, lower as compared to yesterday’s close. The stock price fluctuated between $484.41 and $494.00 throughout the trading session with the volume trading being 3005278 shares, which represented a significant variation when compared to the three months average volume of 2.08 million shares. The firm’s stock price fluctuated -3.24% within the last five trades and -10.13% within the last 30 trades, which was a significant change from the beginning of this year. Despite the fact that the share price decreased -12.07% in the last 6 months and 2.56% was added to its value over the previous 3 months. COST stock is trading at a margin of -6.59%, -8.03% and -6.68% apart from the 20-Day, 50-Day and 200-Day Simple Moving Average prices.

As of the close of trading, COST deals in the Consumer Defensive domain. The stock is trading -20.43 percent below its 52-week high and 19.84 percent above its 52-week low. For example, looking both at the price and the high and low measurements of 52 weeks will give you a clearer picture of the direction the price is heading. The firm’s Weighted Alpha is -1.5. A positive weighted alpha indicates the firm has done well over the course of the year, whereas one below 0 indicates that the firm has done poorly.

What Does Costco Wholesale Corporation’s Profitability and Valuation Ratios Tell Us About the Stock?

With regard to the profitability of the company, the operating margin is currently at 3.50 percent and the profit margin is 2.60 percent, and the company has reported a gross margin of 12.40 percent. The profit margin, also known as the revenue ratio or gross profit ratio, is an efficiency figure used to estimate the business’s profitability by comparing net income and sales. The higher the number, the more profits are generated for the company and vice versa.

The stock’s market cap achieved a total value of $215.52 billion as of the last trading session. Market capitalization is the total value of all outstanding shares of a corporation and it is used to measure a company’s market value. The price-to-earnings ratio for Costco Wholesale Corporation (NASDAQ:COST) is 38.37. The price-to-earnings ratio is a method of assessing corporate values by comparing them to their per-share profit. Forward P/E stands at 33.59. Forward price-to-earnings is calculated using predicted earnings for the next financial year’s P/E determination. The stock has achieved an effective Price-to-Sales Ratio of 0.99 that mirrors the cost to be found for sales by the market. The firm managed a Price-to-Book ratio of 10.83, which equates the market value of a stock with its book value.

Is Insider Trading a Real Thing?

Almost all investors and traders prefer to invest in shares controlled by the management of a corporation as a management company will be more likely to run the business itself and to never conduct things against the management’s desires and will always try to do what is best for their shareholders. Currently, 0.22 percent of Costco Wholesale Corporation shares are owned by insiders, and 69.20 percent are held by financial institutions. Murphy James P., the Executive VP at Costco Wholesale Corporation (COST) has sold 1,500 shares of firm on Jul 20 at a price of $525.20 against the total amount of $0.79 million. In another inside trade, DENMAN KENNETH D, Director of Costco Wholesale Corporation (NASDAQ:COST) sold 300 shares of the firm on Jul 15 for a total worth of $0.16 million at a price of $521.68. An inside trade which took place on Jul 14, Executive VP and CFO of Costco Wholesale Corporation GALANTI RICHARD A sold 1,000 shares of firm against total price of $0.51 million at the cost of $505.60 per share.


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