1 Growth Stock Down 10% to Buy Right Now

Costco (NASDAQ: COST) has been a favorite stock among many investors for years, but over the past 12 months, the wholesale retailer's shares have declined 10%. Part of the reason for the drop may be fueled by investors reallocating their money to more high-growth areas of the market, such as artificial intelligence stocks, while others are worried about Costco's slipping renewal rates.

What's happening with Costco stock right now, and is the latest share price pullback a good buying opportunity? Here's what you should know.

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Why Costco's stock is under pressure right now

Some investors have been concerned lately that Costco's growth hasn't been as impressive as in the past, and the company's (still fantastic) renewal rates for some members are slowing down more than they have traditionally.

For example, one analyst at Roth Capital recently stated that Costco's membership sign-ups in the most recent quarter were only 400,000, compared to a typical membership sign-up of 1 million.

Costco's management said on the first quarter earnings call that while membership sign-ups were lower, this was largely due to younger Costco shoppers who sign up for memberships online and tend to renew at a slower pace. That could persist for a few more quarters, according to Chief Financial Officer Gary Millerchip:

"Our goal is to continue to improve renewal rates by improving engagement with members who signed up digitally. Although for the reasons previously shared, we may still see a slight decline in the overall renewal rate over the next few quarters."

Worries about Costco are overblown

It's worth noting a few key facts from Costco's first quarter as a reminder of just how strong the company's performance was, despite the stock's underperformance. Here are some of the highlights:

• Costco reported earnings per share of $4.50, outpacing Wall Street's consensus estimate of $4.27.
• Revenue increased 8% to $67.3 billion, also beating the analyst's consensus estimate of $67.1 billion.
• Comparable sales increased 5.9% in the U.S. and 6.4% overall.
• Costco's Black Friday sales set a record of over $250 million in non-food orders.

Those are all impressive results, and they indicate that many investors are missing the bigger picture: Costco is still growing at an impressive rate. In addition to all of the above, the company also increased its digital sales by 20.5% in the quarter, traffic on its site rose by 24%, and mobile app traffic jumped 48%.

As I mentioned earlier, the company's membership renewal rates remain very impressive, even if they are slightly lower than in recent years. Costco has 81.4 million paid members, an increase of 5.2% from the year-ago quarter, and North American renewal rates were 92.2% -- down slightly from its average of 93%.

It's a little surprising that some investors latched onto slightly lower renewal rates while overlooking the fact that renewal rates are still enviable by any measure and that the quarterly results are great on nearly every metric.

Ignore the bears and buy Costco stock

While it's not great to see Costco's share price falling right now, the good news is that it's creating a new buying opportunity for investors who recognize that Costco is still successfully expanding its sales and earnings and continues to have strong customer loyalty.

Even if the next few quarters are a bit volatile for Costco stock, nothing has fundamentally changed for the company over the past year that should cause serious concern about its continued growth. For long-term investors, Costco stock looks like a good buy at a discounted price.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.