Is Costco Stock Worth Its High Price?
Membership-based retailer Costco Wholesale (NASDAQ: COST) may have topped last quarter's earnings estimates, but the sales shortfall sent shares reeling. All told, Costco stock suffered a 7.4% setback last Thursday following Wednesday's post-close release of the company's fiscal Q2 results. It was the worst single day for Costco shareholders in nearly two years.
The sheer scope of the sell-off begs a two-part question: Were Costco shares just too vulnerable headed into the report, and if so, might they still be? The answer to both parts of the question is yes.
It wasn't a horrible quarter. The retailer turned $58.4 billion worth of revenue into a per-share profit of $3.92, up from the year-ago comparisons of $55.3 billion and $3.30 per share (respectively). The analyst community was only calling for per-share earnings of $3.62.
Source Fool.com
