COSTCO WHOLESALE CORP (1COST.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1COST - US22160K1051 - Common Stock
730.3 EUR
-2.6 (-0.35%)
Taking everything into account, 1COST scores 6 out of 10 in our fundamental rating. 1COST was compared to 24 industry peers in the Consumer Staples Distribution & Retail industry. Both the health and profitability get an excellent rating, making 1COST a very profitable company, without any liquidiy or solvency issues. 1COST is valied quite expensively at the moment, while it does show a decent growth rate. These ratings would make 1COST suitable for quality investing!
1. Profitability
1.1 Basic Checks
- 1COST had positive earnings in the past year.
- In the past year 1COST had a positive cash flow from operations.
- Each year in the past 5 years 1COST has been profitable.
- In the past 5 years 1COST always reported a positive cash flow from operatings.
1.2 Ratios
- 1COST's Return On Assets of 10.03% is amongst the best of the industry. 1COST outperforms 100.00% of its industry peers.
- Looking at the Return On Equity, with a value of 27.40%, 1COST belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
- 1COST's Return On Invested Capital of 19.55% is amongst the best of the industry. 1COST outperforms 100.00% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for 1COST is significantly above the industry average of 9.20%.
- The last Return On Invested Capital (19.55%) for 1COST is above the 3 year average (19.04%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.03% | ||
| ROE | 27.4% | ||
| ROIC | 19.55% |
ROA(3y)10.06%
ROA(5y)9.55%
ROE(3y)28.02%
ROE(5y)28.18%
ROIC(3y)19.04%
ROIC(5y)18.81%
1.3 Margins
- 1COST has a Profit Margin of 2.96%. This is amongst the best in the industry. 1COST outperforms 80.77% of its industry peers.
- In the last couple of years the Profit Margin of 1COST has grown nicely.
- 1COST has a Operating Margin of 3.80%. This is in the better half of the industry: 1COST outperforms 65.38% of its industry peers.
- 1COST's Operating Margin has been stable in the last couple of years.
- 1COST's Gross Margin of 12.88% is on the low side compared to the rest of the industry. 1COST is outperformed by 76.92% of its industry peers.
- 1COST's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.8% | ||
| PM (TTM) | 2.96% | ||
| GM | 12.88% |
OM growth 3Y2.67%
OM growth 5Y0.6%
PM growth 3Y4.55%
PM growth 5Y4.16%
GM growth 3Y1.87%
GM growth 5Y-0.47%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), 1COST is creating value.
- Compared to 1 year ago, 1COST has about the same amount of shares outstanding.
- The number of shares outstanding for 1COST has been increased compared to 5 years ago.
- Compared to 1 year ago, 1COST has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 8.55 indicates that 1COST is not in any danger for bankruptcy at the moment.
- 1COST has a Altman-Z score of 8.55. This is amongst the best in the industry. 1COST outperforms 96.15% of its industry peers.
- 1COST has a debt to FCF ratio of 0.64. This is a very positive value and a sign of high solvency as it would only need 0.64 years to pay back of all of its debts.
- 1COST's Debt to FCF ratio of 0.64 is amongst the best of the industry. 1COST outperforms 100.00% of its industry peers.
- 1COST has a Debt/Equity ratio of 0.19. This is a healthy value indicating a solid balance between debt and equity.
- 1COST has a better Debt to Equity ratio (0.19) than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 0.64 | ||
| Altman-Z | 8.55 |
ROIC/WACC2.26
WACC8.65%
2.3 Liquidity
- 1COST has a Current Ratio of 1.04. This is a normal value and indicates that 1COST is financially healthy and should not expect problems in meeting its short term obligations.
- The Current ratio of 1COST (1.04) is better than 73.08% of its industry peers.
- A Quick Ratio of 0.53 indicates that 1COST may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.53, 1COST is in the better half of the industry, outperforming 65.38% of the companies in the same industry.
- 1COST does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
- 1COST shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.63%, which is quite good.
- 1COST shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.76% yearly.
- Looking at the last year, 1COST shows a quite strong growth in Revenue. The Revenue has grown by 8.34% in the last year.
- The Revenue has been growing by 10.54% on average over the past years. This is quite good.
EPS 1Y (TTM)9.63%
EPS 3Y11.13%
EPS 5Y15.76%
EPS Q2Q%11.39%
Revenue 1Y (TTM)8.34%
Revenue growth 3Y6.64%
Revenue growth 5Y10.54%
Sales Q2Q%8.3%
3.2 Future
- Based on estimates for the next years, 1COST will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.37% on average per year.
- 1COST is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.09% yearly.
EPS Next Y14.1%
EPS Next 2Y11.83%
EPS Next 3Y11.43%
EPS Next 5Y9.37%
Revenue Next Year8.07%
Revenue Next 2Y7.79%
Revenue Next 3Y7.59%
Revenue Next 5Y7.09%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- 1COST is valuated quite expensively with a Price/Earnings ratio of 45.53.
- Based on the Price/Earnings ratio, 1COST is valued a bit more expensive than 73.08% of the companies in the same industry.
- 1COST's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 28.60.
- Based on the Price/Forward Earnings ratio of 37.34, the valuation of 1COST can be described as expensive.
- Based on the Price/Forward Earnings ratio, 1COST is valued a bit more expensive than 69.23% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of 1COST to the average of the S&P500 Index (25.83), we can say 1COST is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.53 | ||
| Fwd PE | 37.34 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, 1COST is valued a bit more expensive than the industry average as 73.08% of the companies are valued more cheaply.
- 65.38% of the companies in the same industry are cheaper than 1COST, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.85 | ||
| EV/EBITDA | 27.76 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- 1COST has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.23
PEG (5Y)2.89
EPS Next 2Y11.83%
EPS Next 3Y11.43%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.57%, 1COST is not a good candidate for dividend investing.
- 1COST's Dividend Yield is slightly below the industry average, which is at 2.82.
- With a Dividend Yield of 0.57, 1COST pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.57% |
5.2 History
- On average, the dividend of 1COST grows each year by 7.97%, which is quite nice.
Dividend Growth(5Y)7.97%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 27.04% of the earnings are spent on dividend by 1COST. This is a low number and sustainable payout ratio.
- The dividend of 1COST is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP27.04%
EPS Next 2Y11.83%
EPS Next 3Y11.43%
COSTCO WHOLESALE CORP / 1COST.MI FAQ
What is the fundamental rating for 1COST stock?
ChartMill assigns a fundamental rating of 6 / 10 to 1COST.MI.
What is the valuation status of COSTCO WHOLESALE CORP (1COST.MI) stock?
ChartMill assigns a valuation rating of 1 / 10 to COSTCO WHOLESALE CORP (1COST.MI). This can be considered as Overvalued.
Can you provide the profitability details for COSTCO WHOLESALE CORP?
COSTCO WHOLESALE CORP (1COST.MI) has a profitability rating of 8 / 10.
What is the expected EPS growth for COSTCO WHOLESALE CORP (1COST.MI) stock?
The Earnings per Share (EPS) of COSTCO WHOLESALE CORP (1COST.MI) is expected to grow by 14.1% in the next year.
Is the dividend of COSTCO WHOLESALE CORP sustainable?
The dividend rating of COSTCO WHOLESALE CORP (1COST.MI) is 3 / 10 and the dividend payout ratio is 27.04%.