In the world of retail, perhaps no other company provides the mixed sentiment Costco Wholesale Corporation (NASDAQ:COST) has garnered of late. Since posting earnings results which were anything but poor, the company’s stock price has struggled to stay above water; year to date, shares of COST remain flat. Investors are wondering what 2018 might have in store for the retailer have been relegated to guessing which direction the retail industry as a whole will move in the wake of Amazon.com, Inc. (NASDAQ:AMZN) getting into the retail space earlier this year.

The drop in valuations for all grocery retailers was generally astonishing. While some got hit harder than others (and rightfully so), retailers such as COST that felt the brunt force of AMZN. They are now only beginning to stabilize at new lower levels, amid concerns the wider grocery retail industry will continue to experience headwinds.

I have highlighted some of the fundamental factors I believe will allow Costco to maintain its relatively wide “moat” in the grocery retail industry before. Here, I’m going to take a look at what the numbers say about how Costco has performed in the wake of the Amazon-Whole Foods Market, Inc. (NASDAQ:WFM) merger. I’ll also see what appears to be in store for the big box retailer moving forward.

COST by the Numbers

Taking a high level, long-term perspective of how the company has performed since the entrance of AMZN into the grocery retail business, Costco has outperformed relative to expectations. While shares of COST dropped approximately 5% immediately following its earnings release in early October, its ability to continue to post double-digit year over year gains in both its top and bottom line numbers is a sight to behold. This especially is true for investors looking for growth in an industry that is not known for double-digit growth rates.

The quarterly earnings beat of $2.08 per share (3% higher than analyst estimates) and revenue beat of $42.8 billion (2% higher than expectations) did little to assuage investor concerns about membership rates. Rates are a factor in the key thesis of the bear case that dominates the discussion pertaining to COST’s long-term prospects.

Costco continues to grow at a fantastic clip. While the majority of the increase in top and bottom line numbers came due to store openings and not because of an increase in same store sales, sales in existing stores increased at a relatively robust clip. This is particularly true given the massive size of COST compared to the majority of its competitors.

The Bear Case

With all this being said, the bear case for COST stock remains strong. It is buoyed by anticipation among some analysts that membership rates at COST may be indicative of bigger long-term problems. Membership rates at COST remain relatively stable. However, an analyst report from Cowen suggests that an increase in the number of Costco customers with outside memberships indicates that consumer.

The fear that customers will begin to usher in technology to serve their bulk needs has some investors worried that COST’s premium demanded in the stock market may not be as justified as it once was.

Bottom line

Costco may not yet fall into the category of “value stocks,” however with the company’s valuation multiple decreasing after an earnings beat and subsequent price drop, the company certainly looks much more attractive today than it did at the beginning of the year, despite the fact the price an investor is able to snap up shares of COST is approximately the same.

As of this writing the author had no position on any of the aforementioned stocks.