Awarener easy mode Awarener analytic mode

Fundamental analysis: Costco Wholesale Corporation (COST)

Awarener score: 6.0

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Lacking) and growth (Good), and the company's inclination to return cash to the stockholders (Good).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 5.5

  • Business has been growing at a good pace. It's been great when measured against peer companies.
  • Costco Wholesale Corporation business shows some variation, there's some risk. It looks bottom tier against rivals.

Margins score: 5.0

  • COST profit margins -on goods and services sold- are usually very poor. They stand bottom tier against rival companies.
  • Business profit on sales tends to be sufficient. It's weak when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually meagre. They remain in a weak position compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be hardly sufficient in relation to total revenues. They're still mediocre against similar companies.
  • Profits -before income taxes- are usually sufficient considering total sales, and remain below average when measured against rivals.
  • Total net profit tends to be sufficient when confronted to sales. Company stands below average when measured against comparable firms.

Growth score: 5.3

  • Costco Wholesale Corporation profit -on goods and services sold- has been growing at a normal pace. It's been impressive in relation to competitors.
  • In recent years, earnings -on operations- have been growing at a low step, which has been somewhat better than comparable firms.
  • Profits -available to repay debt and purchase properties- have been growing at a low pace, which compares encouraging in relation to peer enterprises.
  • Earnings -before income taxes and interests on loans taken- have been growing at a normal tempo. It turns to be a slight improvement compared to similar stocks.
  • In past years, profits -before income taxes- grew at a low speed. It was somewhat better than rivals.
  • In the previous years, growth on total net profit has been low, and encouraging in relation to peer companies.
  • Earnings per share have grown at a low rhythm in past years. It's been a slight improvement compared to industry peers.

Miscellaneous score: 4.0

  • COST had to pay substantial income taxes in relation to profits made in the past years. It's been slightly worse than peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 9.2

  • Costco Wholesale Corporation usually gets excellent returns on the resources it controls. It proves similar to peer firms.
  • The company normally gets huge proceeds -on the resources directly invested in the business-. They remain in good shape compared to similar companies.
  • Profitability -in relation to owned resources- is usually paramount. It ranks similar to competitors.
  • In the past, got very good returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's below average when measured against comparable enterprises.

Usage of Funds score: 5.5

  • COST usually uses a very large portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is heavy. It stands below average when measured against rival firms.
  • The company is usually largely investing in new property, plant, and equipment, to expand its operating capabilities, which is more than average in relation to industry peers.
  • In the past twelve months it paid low dividends, considering the current stock price. It came mediocre against competitors.
  • Has greatly increased dividend payments in the past years. Business prospects are most likely good. The company has behaved a slight improvement compared to similar firms.
  • The company usually uses a large portion of genuine funds generated to pay dividends. There could be some concerns on sustainability if business takes a dive. Sustainability looks worse than most comparable companies.
  • The company usually neither enlarges nor reduces the pool of investors, resulting in approximately the same mouths feeding on the pie of profits. It remains lacking compared to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands close to average when compared to rivals.
  • The company uses a large portion of genuine fund generation to reward investors, which can probably be sustained for as long as business doesn't turn sour. It still looks almost average when measured against competitors.

Balance Sheet score: 6.8

  • Costco Wholesale Corporation has no intangible assets (like brands and goodwill) according to accounting books, which is safest. It happens to be top tier when measured against peer companies.
  • The company has somewhat lower short-term resources than short-term obligations. Unless it's part of the business model, there might some liquidity concerns. It turns to be close to average when compared to similar firms.
  • Roughly a tenth of resources controlled were provided for with financial debt. Creditors have minor claims on the company, and financial position is safe. It remains top-notch against rival firms.
  • Most controlled resources can be made into cash reasonably quick, which is good for liquidity and risk. It looks top tier when measured against rivals.
  • For every dollar of short-term obligations, the company has less than a dollar of cash and short-term receivables. It's excellent in relation to peer firms.
  • For every dollar of short-term obligations, the company has roughly half of cash and equivalents, which is better than most similar enterprises.
  • Usually, sales are mostly on cash. It still ranks weak when measured against peers.
  • Normally has approximately somewhat less than two months of sales worth in inventory. It comes up as excellent in relation to competitors.
  • On average, it takes approximately two months from the purchase to charging customers. It happens to be top-notch against peers.
  • On average pays suppliers before a month since the purchase. It ranks weak when measured against industry peers.
  • The company pays its suppliers almost when charging its customers, so there's very little money invested in working capital. It's impressive in relation to similar companies.
  • Net interest expenses consume a non-significant portion of usual business earnings, and are therefore extremely easily to bear. It stands well ranked against rival firms.
  • Business earnings have usually been very good when measured against loans taken. Cutting back reinvesting in the business, it could take less than two years to repay the obligations with current profitability. It ranks top tier when measured against comparable enterprises.
  • Revenues are quite good in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks impressive in relation to similar firms.
  • Resource exploitation is huge considering yearly sales, which is great. This metric is normally tied to the industry where the firm belongs. It's still top-notch against peer companies.

Valuation score: 5.1

  • Costco Wholesale Corporation looks very expensive in relation to profits and financial position. It happens to be almost average when measured against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains lacking compared to peers.
  • In the past twelve months, the company generated some free funds in relation to the stock price, which stands mediocre against similar companies.
  • In the past years the company barely generated enough genuine funds to cover up for its business needs. Business prospects should improve to be in a better position to reward investors. It's still below average when measured against industry firms.
  • In the past twelve months, the company has barely rewarded investors, considering both dividends and share on the pie of earnings. It came up in a weak position compared to peer ventures.
  • The company has neither net debt nor net cash. It may borrow extra money if it wishes so, or start cumulating cash for future uses. It looks top-notch against similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation is very high. A lot of improvement expectations are already in the stock price, which is risky. It ranks substantially worse when measured against peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a not far from one-to-one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks lacking compared to rival firms.
  • The relation between the stock price and accounting book value is extremely high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains worse than most peer firms.
  • In the past twelve months, the operating business earned little money when compared to the current stock price and financial position. It happens to be below average when measured against industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown a modest earnings power ability when measured against the current stock price and financial position. It's still in a very weak position compared to peer companies.

Total score: 5.8


COST logos

Company at a glance: Costco Wholesale Corporation (COST)

Sector, industry: Consumer Defensive, Discount Stores

Market Cap: 212.62 billions

Revenues TTM: 217.54 billions

Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan. It offers branded and private-label products in a range of merchandise categories. The company offers sundries, dry groceries, candies, coolers, freezers, liquor, and tobacco and deli products; appliances, electronics, health and beauty aids, hardware, garden and patio products, sporting goods, tires, toys and seasonal products, office supplies, automotive care products, postages, tickets, apparel, small appliances, furniture, domestics, housewares, special order kiosks, and jewelry; and meat, produce, service deli, and bakery products. It also operates pharmacies, opticals, food courts, hearing-aid centers, and tire installation centers, as well as 636 gas stations; and offers business delivery, travel, same-day grocery, and various other services online in various countries. As of August 29, 2021, the company operated 815 membership warehouses, including 564 in the United States and Puerto Rico, 105 in Canada, 39 in Mexico, 30 in Japan, 29 in the United Kingdom, 16 in South Korea, 14 in Taiwan, 12 in Australia, 3 in Spain, 1 in Iceland, 1 in France, and 1 in China. It also operates e-commerce websites in the United States, Canada, the United Kingdom, Mexico, South Korea, Taiwan, Japan, and Australia. The company was formerly known as Costco Companies, Inc. and changed its name to Costco Wholesale Corporation in August 1999. Costco Wholesale Corporation was founded in 1976 and is based in Issaquah, Washington.

Awarener score: 6.0

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Lacking) and growth (Good), and the company's inclination to return cash to the stockholders (Good).