Costco Wholesale Corp has a market capitalization of $145553 million. The enterprise value is equal to $156277 million. With forward sales of $268614 million, COST sells at less than 1x forward sales. As for me, I think that market participants will most likely believe that the company is cheap.
Business Profile
Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan.
Business Growth
Costco Wholesale Corp reports a vast amount of sales growth of 9% y/y with a gross profit ratio of 13%. COST reports EBITDA growth of 6% and an EBITDA ratio of 4%. I do appreciate it. Additionally, operating income is another helpful feature of COST. The company’s operating income grows at 15% y/y.
I also appreciate that net income grew a 937%. I think that net income grows because interest expenses declined a -145%. I think that the company’s performance is good.
Balance Sheet
With an asset/liability ratio of more than 1x, COST’s balance sheet looks stable. In, the total amount of assets was equal to $54918 million, with total liabilities of $38789 million.COST reports $2147 million in cash and cash equivalents. I think that the company is cash-rich.I think that traders will appreciate it.
COST’s short-term debt is less significant than the cash in hand. I think that Costco Wholesale Corp may not have to worry about any liquidity risk.COST trades at 72x EBITDA, which may not seem cheap. Nevertheless, with the company’s EBITDA margin of 4%, the EV/EBITDA ratio makes sense.
Quarterly Results
In COST reported quarterly sales of $44769 million and gross profit of $2147 million. The gross profit ratio was equal to 12x. Besides, COST is profitable, which is useful. Costco Wholesale Corp released a positive quarterly EBITDA of $2160 million. As for me, I think that when more investors get to know the financial statistics of COST, the stock demand will increase.
COST also showed a positive net income of $971.0 million. Taking this into account, many market participants will most likely have a look at COST.
Disclosure: We don’t have COST shares.
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