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Costco Wholesale Corporation (COST) Stock: How Does it Score on Valuation Metrics?

Friday, December 03, 2021 01:47 PM | InvestorsObserver Analysts

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Costco Wholesale Corporation (COST) Stock: How Does it Score on Valuation Metrics?

Costco Wholesale Corporation (COST) receives a weak valuation ranking of 12 from InvestorsObserver data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. COST has a better value than 12% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.

Valuation Rank - 12
COST gets a 12 Valuation Rank today. Find out what this means to you and get the rest of the rankings on COST!

Metrics Analysis

COST has a trailing twelve month Price to Earnings (PE) ratio of 28.2 which places it above the histroical average of roughly 15. COST is currently trading at a poor value due to investors paying more than what the stock is worth in relation to its earnings. COST's trailing-12-month earnings per share (EPS) of 18.78 does not justify its share price in the market. Trailing PE ratios do not factor in the company's projected growth rate, thus, some firms will have high PE ratios caused by high growth recruiting more investors even if the underlying company has produced low earnings so far. COST has a 12 month forward PE to Growth (PEG) ratio of 5.13. Markets are overvaluing COST in relation to its projected growth as its PEG ratio is currently above the fair market value of 1. 18.7800006's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.

Summary

COST's valuation metrics are weak at its current price due to a overvalued PEG ratio due to strong growth. COST's PE and PEG are worse than the market average resulting in a below average valuation score. Click Here to get the full Report on Costco Wholesale Corporation (COST) stock.

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