Key Points
Costco Wholesale (NASDAQ: COST) is experiencing a decline, with its stock down 6.5% year-to-date, significantly underperforming the S&P 500, which has gained 15.3% during the same period. This marks Costco’s worst relative performance against the index in over two decades. In its latest quarter, Costco reported $67.31 billion in revenue and generated $2.46 billion in operating income, leading to a 3.7% operating margin.
In comparison, Amazon (NASDAQ: AMZN) reported $147.16 billion in revenue and $5.99 billion in operating income, achieving a 4.1% operating margin in its most recent quarter. Despite the higher earnings from its Amazon Web Services (AWS) segment, Amazon trades at a forward P/E ratio of 32.2, which is lower than Costco’s 42.4, suggesting a better value proposition for investors.
Analysts from Stock Advisor have identified 10 stocks they recommend over Costco for current investments, emphasizing strong historical returns from those selections.
