Costco Valuation Concerns Amid Strong Fundamentals

27 days ago

Andrew Barry

"Costco – I wrote about Costco negatively for Barr\'s late in 2024. And the argument there was that it\'s a great company, very well run, but you\'re paying over 50 times earnings. The stock has pulled back somewhat. It\'s still probably trading for 45 or 50 times earnings. It\'s very well run... the stock is actually getting closer to a 52-week low, so getting more interesting."

Although Costco is a well-run business with an unbeatable value proposition for its customers, the high valuation (around 45-50x earnings) raises concerns. A further pullback toward its 52-week low could provide a better buying opportunity.

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