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 Rating5/10
Generated at:2026-06-03 17:40:39
Analysis based on real data from 5 financial reports: 2025-08-31, 2025-05-11, 2025-02-16, 2024-11-24, 2024-09-01. Stock price data as of 2026-06-04.
Overview

Costco Wholesale Corporation (COST) is a leading global membership-based warehouse retailer in the Discount Stores industry. The company demonstrates strong and consistent profitability with a proven business model, but its current stock valuation appears significantly elevated based on traditional fundamental metrics, presenting a mixed picture for investors.

Valuation
2/10
Profitability
8/10
Financial health
5/10
Operation Advice
  • Hold existing positions due to the company's strong fundamentals and operational excellence, but do not initiate new buys at the current price level.
  • Wait for a more attractive entry point, as the stock remains richly valued and vulnerable to multiple compression if growth slows or market sentiment shifts.

Valuation

P/E TTM
47.89
P/E LYR
52.22
P/B MRQ
12.63
P/S TTM
--
AI Analysis
  • Valuation metrics suggest the stock is trading at a significant premium relative to its own historical norms and the broader market, with P/E ratios near or above 50 and a P/B ratio above 12. A fundamental valuation suggests a reasonable price range of $730 - $820, while the current price of $961.83 appears significantly above this range, indicating overvaluation based on traditional metrics.
  • The current price is $961.83 (as of 2026-06-04).
  • The P/E (TTM) is 47.89 and the Forward P/E is 52.22, which are very high multiples.
  • The P/B ratio of 12.63 is extremely elevated.
  • The P/S ratio of 1.55 is more reasonable within the retail context but still reflects a premium.
  • The stock has traded between approximately $936.51 and $1096.50 over the last 60 days, with the current price near the lower end of that range.
  • A fundamental valuation based on a normalized, yet still premium, P/E multiple in the low 40s suggests a reasonable price range of $730 - $820.
  • The current price of $961.83 appears significantly above this range, indicating overvaluation based on traditional fundamental metrics.
  • The current multiples leave little margin for error.
Valuation trend

Profitability

ROE TTM
30.69%
Net margin
2.94%
Gross margin
12.84%
Total revenue
275.24B
AI Analysis
  • Costco demonstrates strong and consistent profitability with mid-to-high single-digit revenue and net income growth, stable profit margins typical of the discount retail sector, and exceptionally high returns on capital, particularly a Return on Equity (ROE) of 30.69%.
  • The latest annual report (2025-08-31) shows revenue growth of 8.17% and net income growth of 9.94% year-over-year.
  • This consistent mid-to-high single-digit growth across recent quarters underscores the company's ability to expand profitably.
  • The company maintains stable, albeit thin, margins typical of the discount retail sector.
  • The gross margin of 12.84% and net margin of 2.94% are efficient for its low-price, high-volume model.
  • The Return on Equity (ROE) of 30.69% is exceptionally high, indicating highly efficient use of shareholder capital.
  • The Return on Assets (ROA) of 11.02% is also strong, showing effective deployment of total assets to generate profits.
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
  • The financial health metrics present a mixed picture with adequate liquidity but a low quick ratio, and a moderate level of financial leverage indicated by a debt-to-asset ratio of 62.17%.
  • The current ratio of 1.03 indicates the company can just cover its short-term obligations with its short-term assets.
  • The quick ratio of 0.55 is notably low, suggesting a potential reliance on inventory to meet immediate liabilities, which is a common characteristic of the retail business model but warrants monitoring.
  • The debt-to-asset ratio of 62.17% indicates a moderate level of financial leverage.
  • This level of leverage is not uncommon for large, stable retailers but does introduce an element of financial risk, especially in a rising interest rate environment.
Leverage
2024Q32024Q42025Q12025Q22025Q3
Debt/Asset66.17%66.68%65.07%64.06%62.17%
Liquidity
2024Q32024Q42025Q12025Q22025Q3
Current ratio0.970.981.001.021.03