From 24/7 Wall St. · Chris Lange · · 1m
Jim Cramer Endorses Costco Value Despite High P/E
Jim Cramer says Costco remains a great value despite 49x P/E multiple.
In brief
Jim Cramer says Costco remains a great value despite 49x P/E multiple. Jim Cramer maintains Costco offers great value as membership renewals and revenue growth outpace price increases. Originally reported by 24/7 Wall St..
Cramer's Costco Value Claim
Jim Cramer says Costco represents great value despite recent stock gains.
“I continue to think that Costco represents great value”
Costco's Recent Performance
Costco stock rose 15.9% in one month and 24.67% year to date.
Q4 Sales and Revenue
Costco reported 9.4% comparable sales growth and $95.72 billion revenue.
Membership Model
Costco uses membership fees to fund low prices with 89.8% renewal rate.
Munger's P/E Rule
Charlie Munger said Costco is the only stock you don't need to pay attention to P/E ratio.
“the one stock where you can look past the P/E”
Current P/E Multiple
Costco trades at 49x trailing P/E and 45x forward P/E with 5.1 PEG ratio.
Value Justification
Costco's consistent growth and 787% stock increase over ten years support value claim.
Here's the gist
Jim Cramer maintains Costco offers great value as membership renewals and revenue growth outpace price increases.
