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# Costco: Value For Customers But Not For Investors (Archive)
- URL: https://www.huntingalphas.com/costco-value-for-customers-but-not-for-investors-archive/
- Published: 2024-09-23T07:20:00.000Z
- Updated: 2026-02-27T13:27:03.000Z
- Description: Costco’s stellar customer value contrasts with stretched valuations and weakening investor return drivers.
- Author: Vish (Hunting Alphas)
- Tags: 5-Minute Pitches, #noindex, Archive, #sa-origin, COST, Consumer Staples

*This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.*

## Elevator Pitch

- Costco's incremental growth acceleration is driven only by new warehouse expansions as same-warehouse-sales growth is constant. This can lead to an erosion in return profiles.
- Stock price appreciation over the last 2 years has been driven mostly by a 42% multiple expansion with minimal earnings growth. Yet, the growth profile now is weaker.
- Costco deserves a premium valuation vs its peers. However, I believe a 168% premium to the median 1-yr fwd PE is excessive.
- Relative technicals vs the S&P 500 show a false breakout of a weekly resistance level. Thus, I anticipate further downside and hence underperformance vs the broader market.
- COST has a track record of delivering results mostly in line with expectations. Hence, I do not anticipate major surprises in the upcoming Q4 earnings report.

Read the full article [here](https://seekingalpha.com/article/4722631-costco-value-for-customers-but-not-for-investors-cost-stock?ref=huntingalphas.com).

#### Disclosures and Disclaimers

**Past performance ≠ future results. Not investment advice. See* [**full Disclaimer*](https://www.huntingalphas.com/disclaimer/)**.*