THEY SAY THE STOCK MARKET IS A CIRCUS, AND COSTCO’S STOCK IS THE CLOWN WHO’S BEEN TOLD TO JUGGLE GOLDFISH IN A STORM. FOR YEARS, THIS WHOLE SHINDIG HAS BEEN A GROWTH MACHINE, A FORTRESS OF BARGAINS WHERE THE CROWD CHEERS AS YOU FILL YOUR CART WITH BULK OATMEAL AND FIVE-YEAR-OLD CHIPS. BUT NOW, AS THE CLOWN TAKES A STEP BACK, THE CROWD WHISPERS: “IS IT TIME TO LEAVE?”
RECENTLY, COSTCO DROPPED ANOTHER BURST OF NUMBERS THAT MADE THE BULLS YAWN. REVENUE HIT $86.2 BILLION-JUST A FEW DOLLARS OVER WALL STREET’S DREAMS. EARNINGS PER SHARE? $5.87, A SLIGHTLY HIGHER NUMBER THAN THE STREET EXPECTED. BUT THE STOCK? IT’S SITTING THERE LIKE A DUMPED LOVER, FLAT FOR THE YEAR WHILE THE S&P 500 DANCES IN THE SUN.
THE NUMBERS ARE GOOD, BUT THE MIND IS BAD
COSTCO’S COMPARABLE SALES GROWTH? 5.7%. A SLIGHT SMILE ON THE FACE OF A GROCERY STORE, BUT THE REAL MAGIC IS OUTSIDE THE U.S.-8.6% GROWTH IN FOREIGN LANDS. YEAH, THEY’RE SELLING MORE CHIPS IN MEXICO THAN IN THE HOMESTRETCH. BUT HERE’S THE THING: THE STOCK IS TRADING AT A P/E OF 50. FIFTY! WHILE THE S&P 500 SITS AT 25. IT’S LIKE BUYING A RARE BEER WHEN EVERYONE ELSE IS DRINKING LEMONADE.
THEY’RE TALKING ABOUT KIRKLAND SIGNATURE, A PRIVATE LABEL BRAND THAT’S SUPPOSED TO SAVE YOU FROM TARIFFS. BUT WHAT’S THE POINT? IF THE ECONOMY IS A FIRE, THIS IS JUST A BOTTLE OF WINE IN A BURNING HOUSE. THE MARKET ISN’T BUYING IT. NOT YET.
THE VALUATION IS A BOMB WAITING TO EXPLODE
COSTCO’S STOCK IS A FIVE-STAR HOTEL IN A WAR ZONE. EVERYONE KNOWS IT’S RISKY, BUT NO ONE CAN RESIST THE LUXURY. THE PROBLEM? GROWTH IS SLOW. THE EARNINGS ARE GOOD, BUT THE MARKET ISN’T BUYING THE FUTURE. IT’S LIKE HAVING A FUTURE WHERE YOU’RE SURE TO WIN THE LOTTERY, BUT YOU’RE STILL PAYING FULL PRICE FOR THE TICKET.
THE FEAR IS REAL. CONSUMERS ARE STARTING TO FEEL THE PAIN OF HIGHER PRICES, AND COSTCO’S STOCK IS A TARGET. IF THE ECONOMY TAKES A TURN, THIS THING COULD CRASH LIKE A DRUNK IN A CHURCH. I’M NOT SAYING IT’S A BAD INVESTMENT-JUST THAT IT’S A BAD IDEA TO BUY IT NOW.
SO, IS COSTCO’S STOCK DUE FOR A RALLY? MAYBE. BUT IN THIS GAME, THE ONLY THING THAT’S CERTAIN IS THAT THE HOUSE ALWAYS WINS. AND RIGHT NOW, THE HOUSE IS WEARING A COSTCO T-SHIRT.
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2025-09-29 21:22