Costco's P/E Ratio: Still Lower Than Five Below

Ari Sears

Hot

6 mins

Sep 02, 2022 09:53

Though Costco's current price-to-EBIT ratio is 29x, this is still lower than the levels of 20x set by Five Below.

Looking ahead to the next fiscal year, Costco is expecting continued growth and expansion. The company plans to open new locations, including warehouses and gas stations, and continue growing its online presence. Costco is also investing

At first glance, it may seem like Five Below's stock is better valued than Costco's stock. However, a closer look at the fundamentals reveals that this is not the case. Costco has consistently outperformed Five Below in terms of revenue and operating income growth. Therefore, despite the current gap in valuation, Costco is the better bet.

I foresee continued growth in revenue for the company. This will be driven by continued expansion into new markets and product lines. The company's focus on innovation and customer service

With consumers looking for value in the current inflationary environment, it's no surprise that businesses like Costco and Five Below are attractive to investors. A comparison of the companies' revenue growth shows that Five Below is outpacing Costco, with 23% growth over the last twelve months compared to Costco's 17%. This trend is likely to continue, making Five Below a more attractive investment option in the current market.

• Costco is a warehouse club operator that has seen impressive growth in recent quarters. The company's sales have been fueled by an increase in shopping frequency and transaction totals, as well as an increase in membership households. Additionally, Costco's renewal rate in the U.S. is among the highest in the world, displaying the retailer's ability to maintain and attract new customers to its warehouses.
• It is clear that Five Below still has a lot of growth potential ahead, despite a slowdown in sales in the latest quarter. By 2025, the company plans to double sales and earnings per share, and by 2030 it hopes to more than triple the number of stores. This shows a commitment to long-term growth, and investors can be confident that the company is well positioned to continue expanding in the future.

I see operating income growth as a positive indicator for company health and future success. This metric indicates that a company is generating more revenue than it is spending, which is essential for long

Looking at Five Below's recent operating income growth, it's clear that the company is doing better than Costco in terms of both short- and long-term growth. This is due to Five Below's stronger revenue growth, which has led to higher operating income. It's clear that Five Below is a company to watch in the coming years.

The internet has become an integral part of our lives, connecting us to a global community and providing us with a seemingly endless amount of information. It's hard to imagine

We believe that the gap in valuation between Costco and Five Below will eventually narrow in favor of the less expensive name. We think that Costco's comparative underperformance in revenue and operating income growth compared to Five Below reinforces our conclusion that COST stock is expensive compared to FIVE.

It is always helpful to see how a company's peers are doing in comparison. Checking out Costco's peers can give some insight into how the company is doing on important metrics. There are other valuable comparisons for companies across industries available at Peer Comparisons.

With inflation rising and the Fed raising interest rates, Costco has fallen 8% this year. Can it drop more? See how low can COST stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes. It is difficult to predict how low Costco's stock can go in a market crash, as it depends on a number of factors. However, looking at its performance in previous market crashes can give us some insight. In the 2001 market crash, Costco's stock fell about 50%. In the 2008 market crash, the stock fell about 60%. Therefore, it is possible that the stock could fall by a similar amount in the current market conditions.

If you're looking for a more balanced portfolio, our high-quality portfolio and multi-strategy portfolio have both beaten the market consistently since 2016. With returns of 175% and 262% respectively, you can't go wrong with either of these options.

Trefis provides an excellent service for estimating stock prices. With their help, investors can get a better understanding of how a company's stock price might move in the future. This service is extremely valuable for making investment decisions.