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published in Blogs
Sep 25, 2020

Costco (COST, $338.70) beats Q4 earnings estimates; but COVID-19 expenses climb

Costco Wholesale Corp.  fiscal fourth quarter earnings beat analysts’ expectations. However,  rising coronavirus expenses, including wage increases, had an impact on the results.

The retail company’s  said earnings for the three months ending in August, came in at $3.04 per share, well above analysts’ forecast of $2.85 per share. It was also +13% higher year-over-year.

Revenues climbed +12.5% year-over-year to $52.3 billion in the quarter. Same-store sales rose by +11.4% -- the most in two decades .

However, pandemic-related expenses increased, topping $280 million for the quarter, higher than $100 million forecast. The costs included a $2 per hour premium paid to employees, which equates to around $14 million per week, according to the company.

According to Tickeron, COST is in upward trend: price rose above 50-day moving average on September 21, 2020

COST moved above its 50-day Moving Average on September 21, 2020 date and that indicates a change from a downward trend to an upward trend. In 31 of 44 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are 70%.

Current price $338.70 crossed the resistance line at $340.91 and is trading between $340.91 resistance and $327.60 support lines. Throughout the month of 08/24/20 - 09/24/20, the price experienced a +0.83% Uptrend. During the week of 09/17/20 - 09/24/20, the stock enjoyed a +2% Uptrend growth.

Technical Analysis (Indicators)

Bullish Trend Analysis

The Momentum Indicator moved above the 0 level on September 24, 2020. You may want to consider a long position or call options on COST as a result. In 55 of 99 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 56%.

Following a +0.74% 3-day Advance, the price is estimated to grow further. Considering data from situations where COST advanced for three days, in 227 of 394 cases, the price rose further within the following month. The odds of a continued upward trend are 58%.

The Aroon Indicator entered an Uptrend today. In 187 of 336 cases where COST Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 56%.

Bearish Trend Analysis

The 10-day RSI Indicator for COST moved out of overbought territory on September 03, 2020. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 46 similar instances where the indicator moved out of overbought territory. In 15 of the 46 cases, the stock moved lower in the following days. This puts the odds of a move lower at 33%.

The Stochastic Indicator entered the overbought zone. Expect a price pull-back in the foreseeable future.

The Moving Average Convergence Divergence Histogram (MACD) for COST turned negative on September 04, 2020. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 43 similar instances when the indicator turned negative. In 16 of the 43 cases the stock turned lower in the days that followed. This puts the odds of success at 37%.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where Apple declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 34%.

COST broke above its upper Bollinger Band on September 02, 2020. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

Fundamental Analysis (Ratings)

Tickeron has a negative outlook on this ticker and predicts a further decline by more than 4.00% within the next month with a likelihood of 45%. During the last month, the daily ratio of advancing to declining volumes was 1.11 to 1.

The Tickeron Profit vs. Risk Rating rating for this company is 2 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 77, placing this stock better than average.

The Tickeron PE Growth Rating for this company is 42 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Price Growth Rating for this company is 42 (best 1 - 100 worst), indicating steady price growth. COST’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron SMR rating for this company is 54 (best 1 - 100 worst), indicating slightly weaker than average sales and a marginally profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Valuation Rating of 93 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (9.12) is normal, around the industry mean (5.78). P/E Ratio (41.49) is within average values for comparable stocks, (54.60). COST's Projected Growth (PEG Ratio) (14.98) is very high in comparison to the industry average of (1.21). Dividend Yield (0.83) settles around the average of (1.03) among similar stocks. P/S Ratio (0.84) is also within normal values, averaging (0.88).

Related Ticker: COST

COST in +1.76% Uptrend, advancing for three consecutive days on June 18, 2024

Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where COST advanced for three days, in of 380 cases, the price rose further within the following month. The odds of a continued upward trend are .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Aroon Indicator entered an Uptrend today. In of 397 cases where COST Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .

Bearish Trend Analysis

The RSI Indicator demonstrates that the ticker has stayed in the overbought zone for 10 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where COST declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

COST broke above its upper Bollinger Band on June 04, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

Fundamental Analysis (Ratings)

Fear & Greed

Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 81%.

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 54, placing this stock better than average.

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. COST’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (17.730) is normal, around the industry mean (10.520). COST's P/E Ratio (53.983) is considerably higher than the industry average of (23.937). COST's Projected Growth (PEG Ratio) (5.452) is slightly higher than the industry average of (2.828). Dividend Yield (0.005) settles around the average of (0.024) among similar stocks. P/S Ratio (1.526) is also within normal values, averaging (1.248).

The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.

Notable companies

The most notable companies in this group are Walmart (NYSE:WMT), Costco Wholesale Corp (NASDAQ:COST), Target Corp (NYSE:TGT), Dollar General Corp (NYSE:DG), Dollar Tree (NASDAQ:DLTR), Big Lots (NYSE:BIG).

Industry description

Companies in the discount stores industry specialize in offering substantial discounts on a vast array of retail products. Some companies in this industry also operate general merchandise warehouse clubs. Products sold at discount stores are typically similar to those of any department store, but the pricing of the goods is generally much lower (and hence the name “discount”). Think Dollar General Corporation, Dollar Tree, Inc. and Five Below, Inc. Many discount stores target low-income households and/or price-sensitive consumers as their potential market. Discount stores’ profitability could hinge on factors like competitive pricing, sufficient locations, healthy revenue per square foot, and effective advertisement. These store operators could have an edge over other retailers during financial crises or recessions, when many consumers could be looking for less expensive alternatives.

Market Cap

The average market capitalization across the Discount Stores Industry is 73.16B. The market cap for tickers in the group ranges from 1.78K to 543.74B. WMT holds the highest valuation in this group at 543.74B. The lowest valued company is TUEMQ at 1.78K.

High and low price notable news

The average weekly price growth across all stocks in the Discount Stores Industry was -0%. For the same Industry, the average monthly price growth was -6%, and the average quarterly price growth was 1%. OLLI experienced the highest price growth at 15%, while BIG experienced the biggest fall at -17%.

Volume

The average weekly volume growth across all stocks in the Discount Stores Industry was 4%. For the same stocks of the Industry, the average monthly volume growth was -37% and the average quarterly volume growth was -20%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 56
P/E Growth Rating: 56
Price Growth Rating: 50
SMR Rating: 50
Profit Risk Rating: 53
Seasonality Score: 49 (-100 ... +100)
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COSTDaily Signal changed days agoGain/Loss if shorted
 
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General Information

a company which sells goods through membership warehouses

Industry DiscountStores

Profile
Fundamentals
Details
Industry
Specialty Stores
Address
999 Lake Drive
Phone
+1 425 313-8100
Employees
316000
Web
https://www.costco.com
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