Costco clearly offers great value for its customers. But what about for investors?
That question looms large for prospective buyers of the stock, which now commands a price-to-earnings ratio more than double that of the S&P 500 index, exceeding even glamour stock Netflix. More to the point, it is 15% pricier than its own not-modest 10-year average. That encompasses high expectations and might be part of the reason why, despite better-than-expected earnings, Costco’s shares declined 2.4% after the market close on Thursday following its earnings call.