Costco Wholesale (NASDAQ: COST) is trading at close to 50 times its trailing earnings. Although not near its 52-week high anymore, the stock still looks expensive given its level of profitability. During the past 12 months, Costco shares surged 50%, soaring past the S&P 500 and its 32% gains over that time frame.

But despite its high price tag, there are still many reasons for investors to remain bullish on the stock both for this year and the long haul. Here's why Costco stock can be a great buy, even at its seemingly high valuation.

Revenue growth is important for businesses, but for Costco, membership growth may be even more crucial. Those are the customers who are signing up for one of its memberships and who are planning to spend at its warehouses on a regular basis. And with a high renewal rate, normally around 90% or better, odds are any new members are going to be customers for a long time.

Continue reading

Source Fool.com