Trading at $929 right now. Analysts are throwing around $1,068 targets, so there’s some upside potential on paper.
Here’s the interesting part: it’s trading at 51x P/E, which is pretty rich compared to most stocks. Some valuation models are saying it’s overvalued around $686 fair value. Plus their U.S. sales growth has been slowing – went from 8.3% down to 5.1% recently.
But here’s why people still love it: that membership model is genius. 93% renewal rate means they’ve got predictable recurring revenue. $4.2 billion just from memberships, and they barely have any debt. Pretty solid moat if you ask me.
So what’s the deal? Quality business for sure, but you’re paying a premium for it right now. Probably makes more sense as a long-term hold rather than a quick trade. If anyone’s adding it, might be worth spreading purchases over time given how expensive it is.
Anyone here holding Costco already? Curious what you guys think about the valuation at these levels.