Shares of Costco have been consolidating following its most recent earnings report. The big-box retailer reported 6% revenue growth and continued its trend of a 2.9% profit margin. At last close of 950.95, shares traded around 326 times their profit margin of 2.9%. The trailing 3-year average price-to-profit margin for COST was around ~249x (plus or minus 58). An actionable bottom for Costco Wholesale (COST) appears to be around 850 to 900.
Netflix reported results for the month ending June 2025. TTM revenues of 41.6B were 15% higher than a year ago. UCAN and EMEA region revenues increased by 14% and 17%, respectively, compared to 23% in the APAC region. The streaming firm reported a 25% profit margin, 7% and 8% better than the trailing 3Y and 5Y averages of 18% and 17%, respectively. Profit Margin of 25% was two standard deviations better than the trailing 3-year average of 18% (plus or minus 4%). What grabbed my attention from the company’s commentary on its results was the emphasis placed on international, i.e, non-English content. The company noted that its “local for local” strategy of “developing shows and films that deeply connect with audiences in their home countries” has translated to non-English language series and films representing “more than one-third of all Netflix viewing in the first half of the year.” At the last close of 1209.24, shares traded ~49 times the price-to-profit margin, two standard deviations away from the trailing 3-year average of ~30 times (plus or minus 9). An actionable bottom for Netflix (NFLX) appears to be 1000.
Santa Clara neighbors Palo Alto(PANW) and ServiceNow(NOW) currently trade near their long term averages. Compared to the SP500, these California-based tech firms have gained ~60%. Considering the AI trend is repeated and reinforced in the market narrative, PANW and NOW do stand a chance to pick up their momentum one more time. ServiceNow(NOW) closed at 961.78, whereas Palo Alto(PANW) closed at 190.72 on 7/14/25.
Scottsdale, Arizona-based Construction Materials and Weatherproofing Technologies firm Carlisle Companies Inc(CSL) is down 4% on a 52-week basis, closing at 412.69. Not that long ago, the stock traded below its 100D and 200D moving averages. So far in 2025, the company completed the purchase of Bonded Logic and ThermaFoam, made new appointments to its Board of Directors, and restructured its leadership team. The stock appears to be on the move, and I find it interesting because it plays into the narrative that the “imminent” Fed rate cuts can “positively affect the construction industry,” as “lower borrowing costs make it cheaper for developers to finance new projects.” A company like Carlisle(CSL) can benefit from this conceivable trend.
Considering the company maintains a profit margin of 20-25% and the market rewards the stock with a 17-24x multiple, the stock can trade between 350 and 580.