Indicators somewhat mixed ahead of Costco’s earnings report
Wholesale membership retailer Costco (Nasdaq: COST) is scheduled to report fiscal fourth quarter and year-end earnings on October 3. From a technical perspective the stock has been performing really well since the December low. From a fundamental perspective, the company has some indicators that are sub-par and could hurt the stock going forward.
Let’s look at the chart first. We see the upward trend over the last nine months and we see how a pretty clearly defined trend channel has formed in the last seven months. The stock is just above the lower rail at this time and the lower rail is in close proximity to the 50-day moving average. The stock used the 50-day as support back in August and could do so again.
The daily stochastic readings are in oversold territory and have been for a few days now, but the indicators made a bullish crossover on September 25. If you look back over the last nine months, this is only the second time the indicators have been in oversold territory since December.
The Tickeron Price Growth Rating for Costco is 18 and that indicates outstanding price growth. The stock price has grown at a higher rate over the last 12 months compared to S&P 500 index constituents. A rating of 1 points to highest price growth (largest percent return) while a rating of 100 points to lowest price growth (smallest percent return).
The Relative Strength Rating from Investor’s Business Daily is a 90 and that means Costco’s stock price has performed better than 90% of the stocks in IBD’s database.
Turning our attention to the fundamental outlook we see some indicators that are well above average and others that are below average. Costco’s earnings growth has been decent with an average rate of 15% per year over the last three years. Earnings grew by 11% in the third quarter and they are expected to grow by 18% for the year as a whole.
Another indicator that is above average is the return on equity which is at 25.6%. Unfortunately the company’s profit margin is below average at 3.1% and the sales growth is below average as well. Over the last three years sales have grown at a rate of 9% and they were up by 7% in the third quarter.
If we combine the sales growth, the profit margin, and the return on equity, we get the SMR rating from Tickeron. That indicator for Costco is 76. This indicates weak sales and an unprofitable business model. The SMR rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents.
From a valuation standpoint, Costco seems to be priced relatively well at this time. The Tickeron Valuation Rating is at 9 and that indicates that the company is seriously undervalued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization.
Looking at the sentiment indicators for Costco we see that analysts are a little more pessimistic toward the stock than the average company. There are 27 analysts covering the stock at this time with 16 “buy” ratings, nine “hold” ratings, and two “sell” ratings. This puts the buy percentage at 59.3% and that is slightly below the 65% to 75% average range.
The short interest ratio is slightly below average at 1.73. This is the lowest reading for the ratio over the past year and that indicates that short sellers are becoming more optimistic toward Costco.
If we look at all three analysis categories—fundamental, sentiment, and technical—we see that the fundamentals and the sentiment are mixed while the technical indicators are pretty strong. This could be an interesting earnings report for investors.
COST in -1.07% downward trend, declining for three consecutive days on July 15, 2026
Moving lower for three straight days is viewed as a bearish sign. Keep an eye on this stock for future declines. Considering data from situations where COST declined for three days, in of 279 cases, the price declined further within the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Aroon Indicator for COST entered a downward trend on July 16, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where COST's RSI Indicator exited the oversold zone, of 25 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 52 cases where COST's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on July 16, 2026. You may want to consider a long position or call options on COST as a result. In of 73 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for COST just turned positive on July 16, 2026. Looking at past instances where COST's MACD turned positive, the stock continued to rise in of 46 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where COST advanced for three days, in of 366 cases, the price rose further within the following month. The odds of a continued upward trend are .
COST may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
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 62, placing this stock better than average.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating 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 Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued 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.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. COST’s price grows at a lower 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 average 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 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 (12.516) is normal, around the industry mean (7.559). P/E Ratio (47.564) is within average values for comparable stocks, (38.092). COST's Projected Growth (PEG Ratio) (4.588) is slightly higher than the industry average of (2.872). Dividend Yield (0.006) settles around the average of (0.014) among similar stocks. COST's P/S Ratio (1.432) is slightly higher than the industry average of (1.035).
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General Information
a company which sells goods through membership warehouses
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