Costco Wholesale (COST)
Market Price (4/19/2026): $999.76 | Market Cap: $443.8 BilSector: Consumer Staples | Industry: Consumer Staples Merchandise Retail
Costco Wholesale (COST)
Market Price (4/19/2026): $999.76Market Cap: $443.8 BilSector: Consumer StaplesIndustry: Consumer Staples Merchandise Retail
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Stock buyback supportStock Buyback 3Y Total is 2.4 Bil Attractive cash flow generationCFO LTM is 15 Bil, FCF LTM is 9.1 Bil Low stock price volatilityVol 12M is 19% Megatrend and thematic driversMegatrends include E-commerce & Digital Retail, Experience Economy & Premiumization, Automation & Robotics, Health & Wellness Trends, Show more. | Trading close to highsDist 52W High is -5.0% Weak multi-year price returns2Y Excs Rtn is -0.9% | Expensive valuation multiplesP/EBITPrice/EBIT or Price/(Operating Income) ratio is 38x, P/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 30x, P/EPrice/Earnings or Price/(Net Income) is 52x Key risksCOST key risks include [1] a heavy dependence on membership fee income for profitability and [2] global supply chain disruptions that threaten its low-price value proposition. |
| Stock buyback supportStock Buyback 3Y Total is 2.4 Bil |
| Attractive cash flow generationCFO LTM is 15 Bil, FCF LTM is 9.1 Bil |
| Low stock price volatilityVol 12M is 19% |
| Megatrend and thematic driversMegatrends include E-commerce & Digital Retail, Experience Economy & Premiumization, Automation & Robotics, Health & Wellness Trends, Show more. |
| Trading close to highsDist 52W High is -5.0% |
| Weak multi-year price returns2Y Excs Rtn is -0.9% |
| Expensive valuation multiplesP/EBITPrice/EBIT or Price/(Operating Income) ratio is 38x, P/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 30x, P/EPrice/Earnings or Price/(Net Income) is 52x |
| Key risksCOST key risks include [1] a heavy dependence on membership fee income for profitability and [2] global supply chain disruptions that threaten its low-price value proposition. |
Qualitative Assessment
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1. Strong Fiscal Q1 2026 Earnings Exceeded Expectations. Costco reported robust results for its fiscal first quarter 2026 (ended November 23, 2025), which were announced on December 11, 2025, setting a positive tone for the stock at the beginning of the specified period. The company surpassed analyst expectations with diluted earnings per share (EPS) of $4.50 against a forecast of $4.28, representing a 5.14% positive surprise. Net sales increased by 8.2% year-over-year to $65.98 billion, with comparable sales growing 6.4% (adjusted for gasoline prices and foreign exchange). Notably, digitally-enabled comparable sales surged by 20.5%.
2. Continued Strong Sales Momentum in Early 2026. Costco sustained its robust performance into the new calendar year, reporting net sales of $21.33 billion for January 2026, marking a 9.3% increase from the prior year. This included a 7.1% increase in total company comparable sales (6.4% excluding gasoline prices and foreign exchange) and an impressive 34.4% jump in digitally-enabled sales for the month.
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Stock Movement Drivers
Fundamental Drivers
The 16.1% change in COST stock from 12/31/2025 to 4/18/2026 was primarily driven by a 12.8% change in the company's P/E Multiple.| (LTM values as of) | 12312025 | 4182026 | Change |
|---|---|---|---|
| Stock Price ($) | 861.16 | 999.89 | 16.1% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 280,391 | 286,265 | 2.1% |
| Net Income Margin (%) | 3.0% | 3.0% | 0.9% |
| P/E Multiple | 46.1 | 51.9 | 12.8% |
| Shares Outstanding (Mil) | 444 | 444 | 0.0% |
| Cumulative Contribution | 16.1% |
Market Drivers
12/31/2025 to 4/18/2026| Return | Correlation | |
|---|---|---|
| COST | 16.1% | |
| Market (SPY) | -5.4% | 3.0% |
| Sector (XLP) | 6.2% | 58.9% |
Fundamental Drivers
The 8.3% change in COST stock from 9/30/2025 to 4/18/2026 was primarily driven by a 6.5% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 9302025 | 4182026 | Change |
|---|---|---|---|
| Stock Price ($) | 923.06 | 999.89 | 8.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 268,776 | 286,265 | 6.5% |
| Net Income Margin (%) | 2.9% | 3.0% | 2.3% |
| P/E Multiple | 52.3 | 51.9 | -0.6% |
| Shares Outstanding (Mil) | 444 | 444 | 0.0% |
| Cumulative Contribution | 8.3% |
Market Drivers
9/30/2025 to 4/18/2026| Return | Correlation | |
|---|---|---|
| COST | 8.3% | |
| Market (SPY) | -2.9% | 2.6% |
| Sector (XLP) | 6.1% | 52.7% |
Fundamental Drivers
The 6.3% change in COST stock from 3/31/2025 to 4/18/2026 was primarily driven by a 8.4% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 3312025 | 4182026 | Change |
|---|---|---|---|
| Stock Price ($) | 940.62 | 999.89 | 6.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 264,086 | 286,265 | 8.4% |
| Net Income Margin (%) | 2.9% | 3.0% | 3.5% |
| P/E Multiple | 54.8 | 51.9 | -5.2% |
| Shares Outstanding (Mil) | 444 | 444 | 0.0% |
| Cumulative Contribution | 6.3% |
Market Drivers
3/31/2025 to 4/18/2026| Return | Correlation | |
|---|---|---|
| COST | 6.3% | |
| Market (SPY) | 16.3% | 35.4% |
| Sector (XLP) | 3.2% | 63.2% |
Fundamental Drivers
The 109.6% change in COST stock from 3/31/2023 to 4/18/2026 was primarily driven by a 48.4% change in the company's P/E Multiple.| (LTM values as of) | 3312023 | 4182026 | Change |
|---|---|---|---|
| Stock Price ($) | 477.06 | 999.89 | 109.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 234,390 | 286,265 | 22.1% |
| Net Income Margin (%) | 2.6% | 3.0% | 15.7% |
| P/E Multiple | 35.0 | 51.9 | 48.4% |
| Shares Outstanding (Mil) | 444 | 444 | 0.0% |
| Cumulative Contribution | 109.6% |
Market Drivers
3/31/2023 to 4/18/2026| Return | Correlation | |
|---|---|---|
| COST | 109.6% | |
| Market (SPY) | 63.3% | 43.2% |
| Sector (XLP) | 19.1% | 53.5% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| COST Return | 52% | -19% | 49% | 40% | -5% | 15% | 177% |
| Peers Return | 28% | -21% | 22% | 34% | 0% | 11% | 84% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 3% | 87% |
Monthly Win Rates [3] | |||||||
| COST Win Rate | 75% | 50% | 75% | 50% | 50% | 50% | |
| Peers Win Rate | 65% | 40% | 62% | 68% | 50% | 75% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 50% | |
Max Drawdowns [4] | |||||||
| COST Max Drawdown | -17% | -26% | -1% | -2% | -7% | -1% | |
| Peers Max Drawdown | -6% | -30% | -9% | -5% | -17% | -5% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -7% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: WMT, AMZN, TGT, HD, KR. See COST Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 4/17/2026 (YTD)
How Low Can It Go
| Event | COST | S&P 500 |
|---|---|---|
| 2022 Inflation Shock | ||
| % Loss | -31.5% | -25.4% |
| % Gain to Breakeven | 46.0% | 34.1% |
| Time to Breakeven | 566 days | 464 days |
| 2020 Covid Pandemic | ||
| % Loss | -13.6% | -33.9% |
| % Gain to Breakeven | 15.8% | 51.3% |
| Time to Breakeven | 119 days | 148 days |
| 2018 Correction | ||
| % Loss | -22.2% | -19.8% |
| % Gain to Breakeven | 28.5% | 24.7% |
| Time to Breakeven | 101 days | 120 days |
| 2008 Global Financial Crisis | ||
| % Loss | -48.5% | -56.8% |
| % Gain to Breakeven | 94.2% | 131.3% |
| Time to Breakeven | 701 days | 1,480 days |
Compare to WMT, AMZN, TGT, HD, KR
In The Past
Costco Wholesale's stock fell -31.5% during the 2022 Inflation Shock from a high on 4/7/2022. A -31.5% loss requires a 46.0% gain to breakeven.
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About Costco Wholesale (COST)
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- Walmart for bulk shoppers, with a membership.
- A physical Amazon, but for bulk-discounted goods with a membership.
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- Branded & Private-Label Merchandise: Costco offers a vast array of products, including groceries (fresh, dry, frozen), sundries, appliances, electronics, apparel, home goods, hardware, health & beauty aids, and more, available under various brands and its own Kirkland Signature label.
- Membership-Based Retail Access: The core service is providing exclusive access to a curated selection of products at wholesale prices through its membership warehouse clubs.
- Specialty Health & Wellness Services: This category includes operating on-site pharmacies, optical centers, and hearing-aid centers that provide prescriptions, eye exams, eyeglasses, contact lenses, hearing tests, and hearing aids.
- Automotive & Fuel Services: Costco provides tire installation and maintenance services at its tire centers, alongside selling fuel through numerous gas stations.
- Food Court Services: On-site food courts offer prepared meals, snacks, and beverages for members to enjoy while shopping.
- Online Shopping & Delivery: The company operates e-commerce websites and provides various delivery services, including business delivery and same-day grocery delivery.
- Travel Services: Costco offers members the ability to book travel packages, cruises, rental cars, and hotels through its travel services.
AI Analysis | Feedback
Costco Wholesale (COST) primarily sells to individuals and small businesses rather than other large public companies. The company operates a membership-based model, with its major customers falling into the following categories:
Individual/Household Members: These are the vast majority of Costco's customers, comprising individuals and families who purchase a wide range of products for personal, family, or household consumption. They pay an annual membership fee to access Costco's warehouses and online offerings.
Small Business Members: Costco also caters to small business owners and operators who purchase items in bulk for their commercial needs. This includes products for office supplies, restaurants, resale, or other operational requirements. Costco offers specific business memberships and services like business delivery to support this customer segment.
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Ron Vachris, CEO & President
Ron Vachris assumed the role of CEO of Costco Wholesale Corporation in January 2024. He began his career at Price Club, which later merged with Costco, as a forklift driver in 1982 while studying business at Glendale Community College. Vachris steadily rose through the ranks, serving in various management positions, including senior vice president and general manager, senior vice president of real estate development, and executive vice president of merchandising, before becoming president and chief operating officer in February 2022. He is recognized for reinforcing Costco's tradition of internal advancement and operational rigor.
Gary Millerchip, Executive Vice President & CFO
Gary Millerchip became Costco's Chief Financial Officer in March 2024. Prior to joining Costco, he served as Senior Vice President and CFO at The Kroger Co. from 2019 to 2024, where he led finance and strategy. Millerchip also brings over 20 years of experience in banking, most recently with NatWest Group (formerly Royal Bank of Scotland) in the UK.
Claudine Adamo, Executive Vice President & COO, Merchandising
Claudine Adamo has served as Costco's COO of Merchandising since February 2022. She has spent her entire career of over 30 years at Costco, having advanced from hourly roles to leadership positions in buying, merchandising, and e-commerce.
Torsten Lubach, CTO
Torsten Lubach has served as Costco's Chief Technology Officer since June 2020. In this role, he leads the company's digital and IT modernization, overseeing e-commerce modernization, automation, and global optimization of processes. Lubach's previous experience includes senior IT and digital leadership positions at Lidl in the US and Europe.
Russ Miller, Senior Executive Vice President & COO, Warehouse Operations, U.S. and Mexico
Russ Miller holds the position of Senior Executive Vice President and Chief Operating Officer for Warehouse Operations in the U.S. and Mexico.
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Here are the key risks to Costco Wholesale's business:
- Economic Sensitivity and Inflationary Pressures: Costco operates on intentionally thin margins for its merchandise, making it highly susceptible to economic fluctuations, including inflation, rising energy costs, and supply chain disruptions. These factors can significantly increase merchandising and operational costs, squeezing profitability if not effectively managed or passed on to consumers, which could then impact sales volume. Geopolitical tensions can also escalate trade wars and tariffs, leading to increased import costs and further impacting margins.
- Membership Model Dependence and Potential Saturation: A significant portion of Costco's operating income is derived from its membership fees, which provide a predictable and high-margin revenue stream. A key risk is the potential for membership saturation, particularly in mature markets like the U.S. and Canada, and any decline in membership renewal rates, especially among newer, digitally acquired members. A weakening in membership growth or loyalty could directly impact this crucial profit driver.
- Intense Competition and E-commerce Challenges: The retail industry is characterized by fierce competition from a variety of players, including other warehouse clubs such as Sam's Club and BJ's Wholesale Club, traditional general merchandise retailers like Target and Kroger, and formidable e-commerce platforms like Amazon. Costco faces the ongoing challenge of adapting its e-commerce capabilities to meet evolving consumer preferences for digital convenience without undermining its core warehouse shopping experience. The company's conservative expansion into member-related services compared to competitors' lucrative ecosystems could also pose a long-term disadvantage.
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Costco Wholesale Corporation (symbol: COST) operates across various product and service categories. Here are the addressable market sizes for its main offerings:
- Grocery Market (Food & Sundries, Fresh Foods):
- Global: The global food and grocery retail market was valued at approximately USD 12.36 trillion in 2024.
- Consumer Electronics:
- Global: The global consumer electronics market size was valued at USD 949.7 billion in 2024.
- U.S.: The U.S. consumer electronics market was valued at approximately USD 185.8 billion in 2024.
- Apparel:
- Global: The global apparel market size was valued at USD 1.8 trillion in 2024.
- U.S.: The United States apparel market is projected to reach US$360 billion in 2024. Online apparel sales in the U.S. reached $111 billion in 2024.
- Pharmacies (including Health and Beauty Aids):
- Global: The global pharmacy market size was estimated at USD 1.35 trillion in 2024.
- U.S.: The U.S. pharmacy market size was estimated at USD 732.44 billion in 2024.
- Gas Stations (Gasoline):
- Global: The global gasoline market size was valued at USD 132.67 billion in 2024.
- Tire Installation Centers (Tire Retail):
- Global: The global tire retail market size was USD 221.6 billion in 2024.
- E-commerce (for business delivery, same-day grocery, and various other online services):
- Global: The global e-commerce market is expected to total $6.3 trillion in 2024.
- U.S.: Total U.S. e-commerce sales reached $1.19 trillion in 2024.
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Costco Wholesale Corporation (COST) is anticipated to drive future revenue growth over the next 2-3 years through several key strategies:
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Expansion of Warehouse Footprint: Costco is committed to aggressive physical expansion, with plans to open approximately 30-35 new warehouses annually. The company opened 27 new warehouses in fiscal year 2025 and aims for another 35 in fiscal year 2026. This expansion includes both domestic and international markets, utilizing innovative real estate approaches such as multi-story warehouses and mixed-use developments to penetrate urban areas previously considered out of reach.
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Growth in Membership and Fee Income: A significant driver of revenue is the steady increase in paid memberships and associated fee income. Membership fee income grew by 14% year-over-year in both Q4 2025 and Q1 2026, fueled by new member sign-ups and a strong increase in Executive memberships. As of Q2 2026, Costco reported 82.1 million paid members, a 4.8% increase from the prior year, with Executive memberships growing by 9.5% to 40.4 million. Analysts consistently highlight strong membership growth as a core strength.
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Enhancement of E-commerce and Digital Capabilities: Costco is making strategic investments in its digital presence and capabilities. E-commerce sales increased over 15% in fiscal year 2025, exceeding $19.6 billion. Digitally enabled comparable sales surged by 20.5% in Q1 2026 and 22.6% in Q2 2026, supported by substantial growth in e-commerce site traffic and app visits. The company is also implementing personalization capabilities for product recommendations and improving in-warehouse technology to enhance the member experience.
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Increased Traffic and Average Transaction Size: Initiatives aimed at improving the shopping experience and offering competitive pricing are driving higher store traffic and increasing the average transaction size. Worldwide traffic increased by 3.1% and the average transaction was up 3.2% in Q1 2026. Price reductions on essential items have contributed to traffic growth, while "meaningful improvements in the speed of checkout" and targeted upgrades in the member experience support both sales and productivity.
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Effective Pricing Strategies and Private Label Growth: Costco's disciplined approach to maintaining low prices and leveraging its Kirkland Signature private label continues to attract and retain members. The Kirkland Signature brand consistently grows in sales penetration, offering high-quality value to members. Analysts emphasize Costco's effective pricing strategies and its philosophy of reinvesting in price as key factors enabling sustained market share gains and long-term earnings growth.
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Capital Allocation Decisions of Costco Wholesale (COST) over the Last 3-5 Years
Share Repurchases
- Costco engaged in significant share repurchases, totaling $903 million in fiscal year 2025.
- The company repurchased $700 million in fiscal year 2024 and $676 million in fiscal year 2023.
- In the second quarter of fiscal year 2026, Costco executed $420 million in share buybacks.
Share Issuance
- No significant share issuances with dollar amounts were identified for Costco Wholesale over the last 3-5 years.
Inbound Investments
- No significant inbound investments by third-parties in Costco Wholesale were identified over the last 3-5 years.
Outbound Investments
- No significant strategic outbound investments made by Costco Wholesale in other companies were identified over the last 3-5 years.
Capital Expenditures
- Capital expenditures for Costco have shown a consistent increase, with $5,498 million in fiscal year 2025, $4,710 million in fiscal year 2024, and $4,323 million in fiscal year 2023.
- Costco intends to spend approximately $6,000 million to $6,500 million on capital expenditures during fiscal year 2026.
- The primary focus of these expenditures is on acquiring land, buildings, and equipment for new and remodeled warehouses, information systems, manufacturing and distribution facilities, as well as expanding the global footprint with plans for 28 net new warehouses in fiscal year 2026 and over 30 annually in subsequent years.
Latest Trefis Analyses
| Title | Date | |
|---|---|---|
| DASHBOARDS | ||
| Now Is Not The Time To Buy Costco Wholesale Stock | 04/03/2026 | |
| Can Costco Wholesale Stock Withstand These Pressures? | 03/06/2026 | |
| Is Costco Wholesale Stock Outperforming Its Rivals? | 01/24/2026 | |
| Costco Wholesale vs Dollar Tree: Which Stock Could Rally? | 01/24/2026 | |
| What Can Trigger Costco Wholesale Stock's Slide? | 01/09/2026 | |
| What Could Light a Fire Under Costco Wholesale Stock | 12/25/2025 | |
| Costco Wholesale Earnings Notes | 12/23/2025 | |
| COST Pays Out $31 Bil to Investors in 10 Years | 10/24/2025 | |
| How Low Can Costco Wholesale Stock Really Go? | 10/17/2025 | |
| ARTICLES | ||
| What Can Trigger Costco Wholesale Stock’s Slide? | 03/06/2026 | |
| Costco Wholesale Stock To $704? | 02/28/2026 | |
| Where Does Costco Wholesale Stock Rank Among Competitors? | 01/24/2026 | |
| Costco Wholesale Stock To $687? | 01/24/2026 | |
| The Risk Factors to Watch Out For in Costco Wholesale Stock | 01/09/2026 |
Trade Ideas
Select ideas related to COST.
| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 03272026 | MZTI | Marzetti | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 0.9% | 0.9% | 0.0% |
| 03272026 | TAP | Molson Coors Beverage | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | -0.8% | -0.8% | -1.1% |
| 03202026 | KHC | Kraft Heinz | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 4.3% | 4.3% | -1.7% |
| 03202026 | KMB | Kimberly-Clark | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | -1.8% | -1.8% | -1.9% |
| 03202026 | MKC | McCormick | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | -5.2% | -5.2% | -5.2% |
Research & Analysis
Invest in Strategies
Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 189.20 |
| Mkt Cap | 395.4 |
| Rev LTM | 226,227 |
| Op Inc LTM | 16,238 |
| FCF LTM | 8,397 |
| FCF 3Y Avg | 10,821 |
| CFO LTM | 16,330 |
| CFO 3Y Avg | 16,030 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 6.1% |
| Rev Chg 3Y Avg | 3.6% |
| Rev Chg Q | 4.2% |
| QoQ Delta Rev Chg LTM | 1.1% |
| Op Inc Chg LTM | 1.7% |
| Op Inc Chg 3Y Avg | 12.0% |
| Op Mgn LTM | 4.5% |
| Op Mgn 3Y Avg | 4.7% |
| QoQ Delta Op Mgn LTM | 0.0% |
| CFO/Rev LTM | 6.0% |
| CFO/Rev 3Y Avg | 6.3% |
| FCF/Rev LTM | 2.5% |
| FCF/Rev 3Y Avg | 3.1% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 395.4 |
| P/S | 1.5 |
| P/Op Inc | 28.2 |
| P/EBIT | 25.2 |
| P/E | 38.5 |
| P/CFO | 19.4 |
| Total Yield | 3.7% |
| Dividend Yield | 1.4% |
| FCF Yield 3Y Avg | 3.4% |
| D/E | 0.1 |
| Net D/E | 0.1 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 6.0% |
| 3M Rtn | 5.8% |
| 6M Rtn | 12.3% |
| 12M Rtn | 19.5% |
| 3Y Rtn | 81.7% |
| 1M Excs Rtn | -2.4% |
| 3M Excs Rtn | 3.6% |
| 6M Excs Rtn | 3.8% |
| 12M Excs Rtn | -12.1% |
| 3Y Excs Rtn | 9.2% |
Comparison Analyses
Price Behavior
| Market Price | $999.89 | |
| Market Cap ($ Bil) | 443.9 | |
| First Trading Date | 07/09/1986 | |
| Distance from 52W High | -5.0% | |
| 50 Days | 200 Days | |
| DMA Price | $994.89 | $947.52 |
| DMA Trend | indeterminate | up |
| Distance from DMA | 0.5% | 5.5% |
| 3M | 1YR | |
| Volatility | 19.6% | 18.3% |
| Downside Capture | -0.03 | 0.08 |
| Upside Capture | 21.24 | 13.72 |
| Correlation (SPY) | -4.3% | 14.3% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | -0.17 | -0.11 | 0.06 | 0.04 | 0.38 | 0.56 |
| Up Beta | 0.36 | 0.27 | 0.37 | 0.11 | 0.53 | 0.62 |
| Down Beta | -0.52 | -0.82 | -0.38 | -0.13 | 0.33 | 0.48 |
| Up Capture | -42% | 20% | 59% | 19% | 18% | 37% |
| Bmk +ve Days | 7 | 16 | 27 | 65 | 139 | 424 |
| Stock +ve Days | 10 | 21 | 32 | 59 | 122 | 406 |
| Down Capture | 11% | -5% | -15% | 3% | 32% | 73% |
| Bmk -ve Days | 12 | 23 | 33 | 58 | 110 | 323 |
| Stock -ve Days | 12 | 21 | 31 | 66 | 129 | 343 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with COST | |
|---|---|---|---|---|
| COST | 2.9% | 18.8% | 0.02 | - |
| Sector ETF (XLP) | 4.0% | 12.7% | 0.04 | 56.9% |
| Equity (SPY) | 21.1% | 12.9% | 1.32 | 15.5% |
| Gold (GLD) | 50.9% | 27.5% | 1.49 | -2.2% |
| Commodities (DBC) | 25.2% | 16.2% | 1.40 | -10.0% |
| Real Estate (VNQ) | 17.5% | 13.7% | 0.93 | 24.9% |
| Bitcoin (BTCUSD) | -7.8% | 42.6% | -0.08 | 0.9% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with COST | |
|---|---|---|---|---|
| COST | 23.7% | 22.6% | 0.90 | - |
| Sector ETF (XLP) | 6.2% | 13.2% | 0.26 | 62.4% |
| Equity (SPY) | 10.8% | 17.1% | 0.49 | 56.2% |
| Gold (GLD) | 22.6% | 17.8% | 1.04 | 6.8% |
| Commodities (DBC) | 11.6% | 18.8% | 0.51 | 6.6% |
| Real Estate (VNQ) | 4.4% | 18.8% | 0.14 | 41.9% |
| Bitcoin (BTCUSD) | 5.2% | 56.5% | 0.31 | 20.1% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with COST | |
|---|---|---|---|---|
| COST | 22.9% | 21.9% | 0.92 | - |
| Sector ETF (XLP) | 7.2% | 14.7% | 0.36 | 63.1% |
| Equity (SPY) | 14.0% | 17.9% | 0.67 | 57.0% |
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Returns Analyses
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 3/5/2026 | 1.6% | 2.1% | 3.7% |
| 12/11/2025 | -0.0% | -3.0% | 6.5% |
| 9/25/2025 | -2.9% | -2.8% | -1.2% |
| 5/29/2025 | 3.1% | 0.2% | -1.9% |
| 3/6/2025 | -6.1% | -13.2% | -10.7% |
| 12/12/2024 | 0.1% | -3.4% | -6.6% |
| 9/26/2024 | -1.8% | -2.9% | -1.1% |
| 5/30/2024 | -0.7% | 3.3% | 3.7% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 12 | 12 | 13 |
| # Negative | 12 | 12 | 11 |
| Median Positive | 1.8% | 2.7% | 6.5% |
| Median Negative | -1.6% | -2.8% | -1.9% |
| Max Positive | 6.6% | 5.5% | 13.1% |
| Max Negative | -7.6% | -13.2% | -10.7% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 02/28/2026 | 03/11/2026 | 10-Q |
| 11/30/2025 | 12/17/2025 | 10-Q |
| 08/31/2025 | 10/08/2025 | 10-K |
| 05/31/2025 | 06/05/2025 | 10-Q |
| 02/28/2025 | 03/13/2025 | 10-Q |
| 11/30/2024 | 12/19/2024 | 10-Q |
| 08/31/2024 | 10/09/2024 | 10-K |
| 05/31/2024 | 06/06/2024 | 10-Q |
| 02/29/2024 | 03/13/2024 | 10-Q |
| 11/30/2023 | 12/20/2023 | 10-Q |
| 08/31/2023 | 10/11/2023 | 10-K |
| 05/31/2023 | 06/01/2023 | 10-Q |
| 02/28/2023 | 03/09/2023 | 10-Q |
| 11/30/2022 | 12/29/2022 | 10-Q |
| 08/31/2022 | 10/05/2022 | 10-K |
| 05/31/2022 | 06/02/2022 | 10-Q |
Insider Activity
Expand for More| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Polit, Javier | Executive Vice President | Direct | Sell | 12312025 | 867.21 | 2,049 | 1,776,904 | 9,320,634 | Form |
| 2 | Polit, Javier | Executive Vice President | Direct | Sell | 12312025 | 862.89 | 558 | 481,759 | 8,792,548 | Form |
| 3 | Wilcox, William Richard | Executive Vice President | Direct | Sell | 11122025 | 930.13 | 2,400 | 2,232,312 | 1,860,260 | Form |
| 4 | Barbre, Tiffany Marie | Direct | Sell | 10242025 | 934.62 | 1,239 | 1,158,353 | 4,818,386 | Form | |
| 5 | Adamo, Claudine | Executive Vice President | Direct | Sell | 10242025 | 935.68 | 2,700 | 2,526,336 | 6,410,528 | Form |
COST Trade Sentinel
AVOID (Score 1-2)
CONVICTION RATIONALE
The analysis yields a probability-adjusted skew of 0.69x, indicating a highly unfavorable risk/reward profile at the current valuation. The potential upside is severely limited by the speculative starting multiple, while the downside risk of multiple compression is significant. Even with a high probability of continued business success, the stock price does not offer an attractive entry point.
STOCK ARCHETYPE
Mature Cash CowCostco fits the 'Mature Cash Cow' archetype due to its focus on high capital efficiency (38% ROIC), structural pricing power derived from its membership model, and a predictable, durable, single-digit growth profile, rather than the hyper-growth characteristics of a 'High-Beta Compounder'.
INVESTMENT THESIS
The investment thesis is centered on Costco's high-margin, annuity-like membership fee stream, which provides a highly predictable and growing source of profit that is insulated from the low-margin volatility of the core retail business. This profit engine is fueled by a powerful, self-reinforcing business model where scale-driven cost leadership attracts and retains a loyal member base with exceptionally high renewal rates.
- Membership Fees (High Margin) grew +14% YoY, significantly outpacing Net Sales (Low Margin) growth of +8.2% YoY.
- Membership renewal rates remain exceptionally high at 92.2% in the U.S. & Canada and 89.7% worldwide.
- The number of paid member households grew a robust 5.2% year-over-year in Q1 2026.
PRIMARY RISK
Trading at a P/E ratio of ~53x, a significant premium to its historical average (~39x), Costco's stock is highly vulnerable to multiple compression. The most probable trigger for this de-rating is rising consumer credit stress, which could lead to a slowdown in discretionary spending and average basket size, causing a miss on consensus growth expectations that the current valuation cannot absorb.
- The current P/E ratio of ~53x is substantially above the company's own ten-year historical average of ~39x.
- U.S. household debt has surpassed $18 trillion, with aggregate delinquency rates reaching a multi-year high, indicating tangible financial stress on Costco's target consumer.
| KPI | Threshold | Rationale |
|---|---|---|
| Worldwide Membership Renewal Rate | > 89.5% | This is the single most important indicator of customer loyalty and the health of the high-margin profit stream. A sustained drop below the current level would signal a crack in the core investment thesis. |
| Comparable Sales Growth | > 5.5% | To justify its premium valuation, Costco must continue to demonstrate market share gains. Growth falling below this level would bring its trajectory more in line with peers and challenge the premium multiple. |
| Forward P/E Multiple | Watch for compression below 40x | The primary risk is valuation. A multiple compression towards its historical average of ~39x is the key mechanism for the bear case and indicates a shift in market sentiment away from 'growth at any price'. |
Valuation Premium vs. Execution Perfection
BULL VIEW
Consistent mid-single-digit comps, ~90% renewal rates, and accelerating e-commerce (+20.5%) are structural strengths that command a premium valuation.
CORE TENSION
Can Costco's flawless execution and market share gains justify a 53x P/E, or is it priced for perfection and vulnerable to any macro shock or operational hiccup?
PREVAILING SENTIMENT
The sentiment score is 1.0. While Q1 comps accelerated to 6.4%, the worldwide membership renewal rate dipped 10bps to 89.7%, showing the tension between strong sales and core franchise risk.
BEAR VIEW
A 10bps dip in renewal rates and rising consumer credit stress create downside risk for a stock trading far above its historical average P/E.
| Timeline | Event & Metric To Watch |
|---|---|
March 4, 2026 | Q2 2026 Earnings Call Watch: Worldwide Membership Renewal Rate > 89.7%. A second consecutive sequential decline confirms a negative trend in the highest margin business. |
Monthly (Feb & Mar 2026 data critical) | Monthly Retail Sales Data (Census Bureau) Watch: Growth in 'General Merchandise' and 'Electronics' categories. A material slowdown indicates rising consumer credit stress is impacting Costco's core product areas. |
Ongoing | Federal Reserve Meeting / Inflation Data Watch: U.S. 10-Year Treasury Yield. A sustained break above 4.5% would likely trigger a valuation-driven sell-off in high P/E stocks. |
Ongoing (Q2-Q3 2026) | Supply Chain & Freight Rate Data Watch: Drewry's World Container Index (WCI) for Asia-U.S. routes. A persistent rise signals a return of margin pressure from freight costs. |
| Date | Event | Stock Impact |
|---|---|---|
9/5/2025 | August 2025 Sales Report Details: Costco released its August sales figures, showing an 8.7% year-over-year increase in net sales, which met market expectations. | Flat (0.8%) $953.24 -> $960.80 |
9/25/2025 | Q4 FY2025 Earnings Release Details: Costco reported revenue and EPS that beat analyst estimates for its fiscal fourth quarter. [29] The stock saw little change, suggesting results were largely priced in. | Muted (-0.2%) $942.64 -> $940.69 |
10/9/2025 | September 2025 Sales Report Details: Costco announced sales figures for September, which were received positively by the market, leading to a significant single-day stock price increase. | Rose significantly by 3.1% $912.26 -> $940.27 |
11/5/2025 | October 2025 Sales Report Details: Costco reported its sales results for the retail month of October. The muted stock reaction suggests the results were in line with expectations. | Muted (-0.6%) $939.45 -> $933.75 |
12/11/2025 | Q1 FY2026 Earnings Release Details: Costco reported Q1 EPS of $4.50, beating estimates of $4.28. [4] Despite the beat, the stock reaction was muted as investors weighed a 10bps decline in worldwide renewal rates. | Modest 1.2% gain $873.21 -> $883.27 |
2/4/2026 | January 2026 Sales Report Details: Costco reported strong January sales with comparable sales up 7.1% and digitally-enabled sales surging 34.4%, indicating continued business momentum. | Modest 1.1% gain $978.35 -> $989.29 |
Position Sizing
4%-6%
NORMAL
Stock trades in a Moderate Volatility regime (1.7x S&P). The Neutral sentiment and Expensive valuation prevent an aggressive stance, despite high business quality. This is a classic 'growth at a price' scenario, warranting a Normal allocation.
Diversification Alternatives
PSMT
INDUSTRYApplies Costco's proven warehouse club model to less saturated emerging markets, offering a potentially longer runway for unit growth.
MNST
SECTOROffers pure-play exposure to the high-growth energy drink category with a powerful global brand, a different risk profile than broadline retail.
Repricing Catalyst
External Quote Links
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| SeekingAlpha | ValueLine |
| Motley Fool | Robinhood |
| CNBC | Etrade |
| MarketWatch | Unusual Whales |
| YCharts | Perplexity Finance |
| FinViz |
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