Costco Wholesale Corporation(COST) - Stock detail

Costco Wholesale Corporation

US
COST
Costco Wholesale Corporation(Listing date: 12/05/1985)

Costco began operations in Seattle, Washington in 1983. The company is primarily engaged in the operation of membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom (U.K.), Mexico, Japan, South Korea, Australia, Spain, France, Iceland, and China, and operates a subsidiary in Taiwan, China. The company's philosophy for operating membership warehouses is to provide members with a wide selection of national and private brand products at low prices, generating high sales volume and rapid inventory turnover.

AI Value AnalystHold
Overall Rating6.3/10
Generated at:2026-03-04 16:36:46
Analysis based on 5 financial reports covering periods: 2025-08-31, 2025-05-11, 2025-02-16, 2024-11-24, 2024-09-01. Data includes annual report for FY2025 ending August 31, 2025, with TTM metrics as of the latest reporting period.
Overview

Costco Wholesale Corporation demonstrates strong fundamental characteristics with exceptional profitability metrics, consistent revenue growth, and solid financial health, though current valuation multiples appear elevated relative to historical averages and broader market.

Valuation
3/10
Profitability
9/10
Financial health
7/10
Operation Advice
  • Hold existing positions, consider adding positions below $950 for better risk-adjusted returns, consider partial profit-taking above $1,100 if multiple expansion continues, maintain stop-loss level at $900 for downside protection.

Valuation

P/E TTM
53.88
P/E LYR
52.22
P/B MRQ
14.76
P/S TTM
--
AI Analysis
  • Current market valuation presents premium multiples with P/E of 53.88x (TTM) and forward P/E of 52.22x, indicating fully valued pricing relative to historical multiples but supported by strong fundamentals and growth prospects.
  • Current Price: $1,006.74 (as of 2026-03-05)
  • P/E (TTM): 53.88x (significantly above historical market averages)
  • Forward P/E: 52.22x (indicating continued premium valuation expectations)
  • P/B: 14.76x (elevated relative to book value)
  • P/S: 1.63x (reasonable for retail sector)
  • Base Case Target: $1,050-$1,100 (5-9% upside) - Based on 55x forward earnings multiple
  • Conservative Target: $950-$1,000 (5-6% downside) - Based on 50x earnings multiple
  • Optimistic Target: $1,100-$1,150 (9-14% upside) - Based on 58x earnings multiple
  • Current price appears fully valued relative to historical multiples, though supported by strong fundamentals and growth prospects
Valuation trend

Profitability

ROE TTM
30.69%
Net margin
2.94%
Gross margin
12.84%
Total revenue
275.24B
AI Analysis
  • Costco demonstrates exceptional profitability with ROE of 30.69% and ROA of 11.02%, exceeding industry averages and showing consistent margin maintenance despite revenue growth, indicating effective cost management.
  • Return on Equity (ROE): 30.69% (TTM) indicates highly efficient use of shareholder capital
  • Return on Assets (ROA): 11.02% (TTM) reflects strong asset utilization efficiency
  • Gross margin: 12.84% (slightly improved from 12.61% previous year)
  • Net margin: 2.94% (stable compared to historical levels)
  • Net income growth: 9.94% YoY to $8.10B
  • EPS growth: 9.94% YoY to $18.24 (basic)
  • Profitability metrics exceed industry averages, particularly ROE and ROA
  • Consistent margin maintenance despite revenue growth indicates effective cost management
Profitability
2024Q32024Q42025Q12025Q22025Q3
ROE TTM--7.48%14.58%21.63%30.69%
Earnings
2024Q32024Q42025Q12025Q22025Q3
Total revenue254.45B62.15B125.87B189.08B275.24B

Financial health

Debt/Asset
62.17%
Current ratio
1.03
Quick ratio
0.55
Cash ratio
0.55
AI Analysis
  • Costco exhibits strong financial health with consistent revenue growth (8.17% YoY to $275.24B), adequate liquidity (current ratio 1.03), moderate leverage (debt-to-equity 62.17%), and strong operational cash flow generation.
  • Revenue Growth: Consistent revenue growth demonstrated across reporting periods, with FY2025 revenue reaching $275.24B (8.17% YoY growth)
  • Liquidity Position: Current ratio of 1.03 indicates adequate short-term liquidity
  • Quick ratio of 0.55 suggests moderate reliance on inventory
  • Leverage: Debt-to-equity ratio of 62.17% represents moderate leverage, typical for capital-intensive retail operations
  • Cash Flow Generation: Strong operational cash flow evidenced by consistent profitability and growth patterns
  • Company maintains solid financial foundations with healthy revenue growth trajectories
  • Liquidity metrics warrant monitoring given inventory-intensive business model
Leverage
2024Q32024Q42025Q12025Q22025Q3
Debt/Asset66.17%66.68%65.07%64.06%62.17%
Liquidity
2024Q32024Q42025Q12025Q22025Q3
Current ratio0.970.981.001.021.03