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 Rating5.7/10
Generated at:2026-04-17 17:42:30
Analysis based on real data from 5 financial report periods: 2025-08-31, 2025-05-11, 2025-02-16, 2024-11-24, 2024-09-01. Market price data as of 2026-04-17 close. Data completeness is good, covering key financial statements for fundamental analysis.
Overview

Costco Wholesale Corporation (COST) is a leading global operator of membership-based warehouse clubs with a defensive business model in the Discount Stores industry. The company demonstrates exceptionally strong profitability and a high-quality business model, but its stock is currently trading at a significant premium based on traditional valuation metrics, making the risk/reward proposition unfavorable for new investors.

Valuation
2/10
Profitability
9/10
Financial health
6/10
Operation Advice
  • For existing shareholders, the company's quality may justify holding for the long term.
  • For new investors, the recommendation is to wait for a meaningful pullback in price (bringing the P/E closer to the 35-40x range) or a clear acceleration in earnings growth that justifies the current premium before considering a buy.
  • A downgrade to Sell would be triggered by a deterioration in fundamental metrics while valuation remains elevated.

Valuation

P/E TTM
51.89
P/E LYR
52.22
P/B MRQ
13.83
P/S TTM
--
AI Analysis
  • Costco's stock is substantially overvalued based on traditional earnings-based metrics, trading at a P/E of 51.23 and a P/B of 13.65, which are very high multiples. The current price of $999.89 is above even optimistic fair value estimates derived from a 40x P/E multiple.
  • Current Market Price: $999.89 (as of 2026-04-17 close).
  • P/E (TTM): 51.23. This is a very high earnings multiple, far above the market average.
  • P/B: 13.65. This extremely high price-to-book ratio is consistent with the high ROE.
  • P/S (TTM): 1.61. This ratio is more reasonable compared to P/E and P/B.
  • Using the TTM Diluted EPS of $18.21 and the P/E (TTM) of 51.23, the current price aligns with these figures.
  • Conservative Fair Value (30x P/E): $546.30.
  • Moderate Fair Value (35x P/E): $637.35.
  • Optimistic Fair Value (40x P/E): $728.40.
  • The current price of $999.89 is substantially above even the optimistic fair value range.
  • This indicates the stock is overvalued based on traditional earnings-based valuation metrics.
Valuation trend

Profitability

ROE TTM
30.69%
Net margin
2.94%
Gross margin
12.84%
Total revenue
275.24B
AI Analysis
  • Costco demonstrates exceptionally strong and consistent profitability with high returns on equity and assets, steady revenue growth, and stable profit margins intrinsic to its low-price, high-volume business model.
  • Revenue growth has been steady, with the latest annual (2025-08-31) revenue of $275.24B growing 8.17% year-over-year.
  • Net income growth of 9.94% for the same period outpaced revenue growth, indicating operating leverage.
  • The company operates on thin but stable margins, with a net margin of 2.94% and a gross margin of 12.84%.
  • This margin profile is intrinsic to its low-price, high-volume business model.
  • The stability of these margins across reporting periods is a sign of excellent cost control and pricing power.
  • The standout metrics are Return on Equity (ROE) of 30.69% and Return on Assets (ROA) of 11.02%.
  • These are exceptionally high figures, indicating that management is highly efficient at generating profits.
  • This is a hallmark of a superior business model.
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 company's financial health shows a mixed picture with tight liquidity ratios typical for a retailer but strong profitability and cash flow generation providing a buffer, along with a moderate level of financial leverage.
  • The current ratio of 1.03 indicates the company has just enough current assets to cover its current liabilities.
  • The quick ratio of 0.55 is low, suggesting a heavy reliance on inventory to meet short-term obligations.
  • This is typical for a high-volume retailer but warrants monitoring.
  • The debt-to-asset ratio of 62.17% indicates a moderate level of financial leverage.
  • This is not uncommon for large, stable corporations and suggests a balanced use of debt.
  • The balance sheet is characteristic of a large-scale retailer.
  • While liquidity ratios are tight, the consistent profitability and strong cash flow generation provide a buffer to manage its obligations.
Leverage
2024Q32024Q42025Q12025Q22025Q3
Debt/Asset66.17%66.68%65.07%64.06%62.17%
Liquidity
2024Q32024Q42025Q12025Q22025Q3
Current ratio0.970.981.001.021.03