Costco’s Stock Performance Lags Despite Strong Earnings, Raising Rally Potential

Costco Wholesale Corporation (COST -0.55%) continues to demonstrate financial resilience with its latest earnings report, yet its stock remains subdued this year. The retailer's fiscal Q4 revenue of $86.2 billion narrowly surpassed analyst expectations, while earnings per share of $5.87 exceeded projections. Comparable sales growth—a critical metric for retail health—clocked in at a robust 5.7%, signaling sustained organic demand.

Despite these fundamentals, COST shares have underperformed in 2024. Market observers note the disconnect between operational excellence and market valuation, particularly given Costco's untapped expansion potential in underpenetrated regions. The warehouse giant's North American concentration leaves ample runway for international growth.

Investors appear to be weighing macroeconomic headwinds against Costco's consistent execution. The stock's stagnation contrasts sharply with its historical growth trajectory, prompting speculation about an overdue bullish correction. Value investors may view this as a potential accumulation opportunity before seasonal holiday sales catalysts emerge.