Costco Wholesale (COST) Q4 results reinforced the notion that its growth story is evolving rather than ending, with richer membership economics and accelerating warehouse expansion increasingly offsetting a natural moderation in member growth as the business matures, UBS said in a note emailed Friday.

The firm said rising executive membership penetration is creating a virtuous cycle in which higher-paying members spend more, engage more often and renew at higher rates, making member quality a more important driver than the pace of member additions.

UBS also pointed to management's plan to open 33 new locations next year, including five relocations, as a sign of confidence in long-term demand and a meaningful acceleration versus recent years.

UBS said the results show Costco can keep generating double-digit earnings growth without relying on margin expansion or financial engineering, calling the underlying drivers of that growth increasingly favorable.

The firm maintained its buy rating and $1,275 price target on the stock.

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