Costco Membership Renewal Rates Exceed 90%, Future Revenue Growth Promising
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Source: Fool
- Strong Membership Renewal Rates: Costco's membership renewal rates exceed 90% in the U.S. and Canada, reflecting customer loyalty and providing a stable revenue source, which enhances future profitability.
- Membership Fees Drive Profit: With Gold Star membership at $65 and Executive membership at $130, the increasing trend of Gold Star members upgrading to Executive will further boost the company's revenue growth, highlighting the importance of membership fees.
- Long-Term Investment Potential: A $10,000 investment in Costco over the past decade has grown to over $60,000, showcasing the company's strong performance in long-term investments, although it hasn't reached multimillionaire status yet, attracting more investor interest.
- Performance in Economic Downturns: During tough economic times, consumers focus on low prices, and Costco's strategy of offering rock-bottom prices positions it competitively in the market, likely attracting more customers to offset membership fees and drive sales growth.
COST
$871.86+Infinity%1D
Analyst Views on COST
Wall Street analysts forecast COST stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for COST is 1092 USD with a low forecast of 907.00 USD and a high forecast of 1218 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
24 Analyst Rating
16 Buy
8 Hold
0 Sell
Moderate Buy
Current: 854.790
Low
907.00
Averages
1092
High
1218
Current: 854.790
Low
907.00
Averages
1092
High
1218
About COST
Costco Wholesale Corporation (Costco) operates membership warehouses and e-commerce sites that offer a selection of nationally branded and private-label products in a wide range of categories. The Company buys the majority of its merchandise directly from suppliers and route it to cross-docking consolidation points (depots) or directly to its warehouses. It operates 891 warehouses, including 614 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 35 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, and one each in Iceland, New Zealand and Sweden. It also operates e-commerce sites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia. The Company provides wide selection of merchandise, plus the convenience of specialty departments and exclusive member services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
