Warehouse club operator Costco (COST) came out with impressive results. The stock has been impressive on the market, trading close to its 52-week high and at a rich valuation. Also, investors seem confident of its outperformance in the future. Let us see how Costco manages to maintain this momentum.
The Road Forward
Costco’s solid business model should prove to be a growth driver for the company as it is attracting many new customers to its warehouse. The company has a lot of growth opportunities going forward. A slight change in its operations, as well as premium adjustment, can make it a solid investment.
Costco counts on membership fees for growth and operating margins. This is not only a growth driver to the revenue, but also a solid indicator of the brand’s strength. Also, investors are attracted to the company’s membership fees strategy as seen in a 12% increase in the membership fees.
— Guru Focus