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Costco Wholesale Corp  (NAS:COST) PE Ratio: 31.99 (As of Today)

As of today, Costco Wholesale Corp's share price is $249.51. Costco Wholesale Corp's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Feb. 2019 was $7.80. Therefore, Costco Wholesale Corp's P/E ratio for today is 31.99.

Warning Sign:

Costco Wholesale Corp stock PE Ratio (=32.05) is close to 10-year high of 34.01


NAS:COST' s PE Ratio Range Over the Past 10 Years
Min: 14.33   Max: 34.01
Current: 31.99

14.33
34.01

During the past 13 years, the highest P/E Ratio of Costco Wholesale Corp was 34.01. The lowest was 14.33. And the median was 25.72.


NAS:COST's PE Ratio is ranked lower than
74% of the 303 Companies
in the Global industry.

( Industry Median: 18.85 vs. NAS:COST: 31.99 )

Costco Wholesale Corp's Earnings per Share (Diluted)for the three months ended in Feb. 2019 was $2.01. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Feb. 2019 was $7.09.

As of today, Costco Wholesale Corp's share price is $249.51. Costco Wholesale Corp's EPS without NRIfor the trailing twelve months (TTM) ended in Feb. 2019 was $7.09. Therefore, Costco Wholesale Corp's PE Ratio without NRIratio for today is 35.19.

During the past 13 years, Costco Wholesale Corp's highest PE Ratio without NRI Ratio was 34.01. The lowest was 14.33. And the median was 25.72.

Costco Wholesale Corp's EPS without NRI for the three months ended in Feb. 2019 was $2.01. Its EPS without NRI for the trailing twelve months (TTM) ended in Feb. 2019 was $7.09.

During the past 12 months, Costco Wholesale Corp's average EPS without NRI Growth Rate was 16.20% per year. During the past 3 years, the average EPS without NRI Growth Rate was 9.70% per year. During the past 5 years, the average EPS without NRI Growth Rate was 8.70% per year. During the past 10 years, the average EPS without NRI Growth Rate was 10.60% per year.

During the past 13 years, Costco Wholesale Corp's highest 3-Year average EPS without NRI Growth Rate was 41.70% per year. The lowest was -17.90% per year. And the median was 9.90% per year.

Costco Wholesale Corp's EPS (Basic) for the three months ended in Feb. 2019 was $2.02. Its EPS (Basic) for the trailing twelve months (TTM) ended in Feb. 2019 was $7.15.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Costco Wholesale Corp Annual Data

Aug09 Aug10 Aug11 Aug12 Aug13 Aug14 Aug15 Aug16 Aug17 Aug18
PE Ratio Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 25.98 26.08 30.35 25.78 32.84

Costco Wholesale Corp Quarterly Data

May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 May18 Aug18 Nov18 Feb19
PE Ratio Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 28.45 29.07 32.84 31.34 28.04

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Costco Wholesale Corp Distribution

* The bar in red indicates where Costco Wholesale Corp's PE Ratio falls into.



Calculation

The P/E ratio is the most widely used ratio in the valuation of stocks.

Costco Wholesale Corp's P/E Ratio for today is calculated as

P/E Ratio=Share Price/Earnings per Share (Diluted) (TTM)
=249.51/7.8
=31.99

Costco Wholesale Corp's Share Price of today is $249.51.
Costco Wholesale Corp's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Feb. 2019 was 1.7 (May. 2018 ) + 2.36 (Aug. 2018 ) + 1.73 (Nov. 2018 ) + 2.01 (Feb. 2019 ) = $7.09.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

It can also be calculated from the numbers for the whole company:


There are at least three kinds of P/E ratios used by different investors. They are Trailing Twelve Month P/E Ratio or P/E (ttm), forward P/E, or PE Ratio without NRI. A new P/E ratio based on inflation-adjusted normalized P/E ratio is called Shiller PE Ratio, after Yale professor Robert Shiller.

In the calculation of P/E (ttm), the earnings per share used are the earnings per share over the past 12 months. For Forward P/E, the earnings are the expected earnings for the next twelve months. In the case of PE Ratio without NRI, the reported earnings less the non-recurring items are used.

For the Shiller P/E, the earnings of the past 10 years are inflation-adjusted and averaged. The result is used for P/E calculation. Since it looks at the average over the last 10 years, Shiller P/E is also called PE10.


Explanation

The P/E ratio can be viewed as the number of years it takes for the company to earn back the price you pay for the stock. For example, if a company earns $2 a share per year, and the stock is traded at $30, the P/E ratio is 15. Therefore it takes 15 years for the company to earn back the $30 you paid for its stock, assuming the earnings stays constant over the next 15 years.

In real business, earnings never stay constant. If a company can grow its earnings, it takes fewer years for the company to earn back the price you pay for the stock. If a company’s earnings decline it takes more years. As a shareholder, you want the company to earn back the price you pay as soon as possible. Therefore, lower-P/E stocks are more attractive than higher P/E stocks so long as the P/E ratio is positive. Also for stocks with the same P/E ratio, the one with faster growth business is more attractive.

If a company loses money, the P/E ratio becomes mearningless.

To compare stocks with different growth rates, Peter Lynch invented a ratio called PEG. PEG is defined as the P/E ratio divided by the growth ratio. He thinks a company with a P/E ratio equal to its growth rate is fairly valued. Still he said he would rather buy a company growing 20% a year with a P/E of 20, instead of a company growing 10% a year with a P/E of 10.

Because the P/E ratio measures how long it takes to earn back the price you pay, the P/E ratio can be applied to the stocks across different industries. That is why it is the one of the most important and widely used indicators for the valuation of stocks.

Similar to the Price/Sales ratio and Price/Cash Flow or Price/Free Cash Flow, the P/E ratio measures the valuation based on the earning power of the company. This is where it is different from the Price/Book ratio, which measures the valuation based on the company’s balance sheet.


Be Aware

Investors need to be aware that the P/E ratio can be misleading a lot of times, especially when the underlying business is cyclical and unpredictable. As Peter Lynch pointed out, cyclical businesses have higher profit margins at the peaks of the business cycles. Their earnings are high and P/E ratios are artificially low. It is usually a bad idea to buy a cyclical business when the P/E is low. A better ratio to identify the time to buy a cyclical businesses is the Price-to-Sales Ratio (P/S).

P/E ratio can also be affected by non-recurring-items such as the sale of part of businesses. This may increase for the current year or quarter dramatically. But it cannot be repeated over and over. Therefore PE Ratio without NRI is a more accurate indication of valuation than P/E (ttm).


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