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 Rating5.3/10
Generated at:2026-06-11 17:41:26
Analysis based on 5 financial reports from periods: 2025-08-31, 2025-05-11, 2025-02-16, 2024-11-24, and 2024-09-01. Stock price data as of 2026-06-11 close at $975.69. Data includes financial metrics, valuation multiples, and historical price ranges over the last 60 days.
Overview

Costco Wholesale Corporation is a leading global retailer with a strong membership-based business model in the defensive Consumer Defensive sector. The company demonstrates exceptional profitability and consistent growth but faces valuation concerns due to high multiples. Financial health shows strong profitability metrics but moderate leverage and tight liquidity typical for inventory-intensive operations.

Valuation
2/10
Profitability
8/10
Financial health
6/10
Operation Advice
  • Existing shareholders could continue to hold based on the company's long-term quality and track record.
  • New investors may want to wait for a more attractive entry point, potentially in the $920-$1050 range.
  • Monitor the company's ability to maintain growth rates to justify current valuation multiples.

Valuation

P/E TTM
49.34
P/E LYR
52.22
P/B MRQ
13.01
P/S TTM
--
AI Analysis
  • Costco's stock appears overvalued based on traditional metrics with a P/E ratio of 49.34 and P/B ratio of 13.01, indicating the market is assigning a significant premium for quality and growth consistency. The current price of $975.69 sits within a reasonable near-term fundamental range of $920-$1050 but closer to the upper half.
  • P/E Ratio (TTM) is 49.34, which is a very high valuation multiple significantly above the market average
  • P/B Ratio is 13.01, which is extremely high, confirming the market's willingness to pay a large premium for the company's exceptional return profile
  • P/S Ratio (TTM) is 1.57, which is the most reasonable of the three multiples but still high for a retailer
  • Historical trading range over the last 60 days was between $936.51 (low on 2026-06-01) and $1096.50 (high on 2026-05-19)
  • A reasonable near-term fundamental price range could be $920 - $1050 based on elevated historical multiples and recent price action
  • Based on traditional valuation metrics (P/E, P/B), Costco's stock is overvalued
  • The market is assigning a premium for quality, growth consistency, and defensive attributes that is not justified by standard value metrics
Valuation trend

Profitability

ROE TTM
30.69%
Net margin
2.94%
Gross margin
12.84%
Total revenue
275.24B
AI Analysis
  • Costco demonstrates consistent and robust profitability with steady revenue growth of 8.17% year-over-year to $275.24B for FY2025 and net income growth of 9.94% to $8.10B. Margins are stable with effective cost control within its low-margin business model.
  • Revenue for the fiscal year ending August 2025 grew 8.17% year-over-year to $275.24B, continuing a trend of mid-to-high single-digit growth
  • Net income for FY 2025 grew 9.94% to $8.10B
  • The previous fiscal year (2024) showed an even stronger 17.09% increase in net income
  • Gross Margin for FY2025 was 12.84% and Net Margin was 2.94%, both stable with slight improvement
  • The margin stability indicates effective cost control and pricing power within its low-margin business model
  • Basic EPS for FY2025 was $18.24, up from $16.59 the previous year
  • Costco's profitability is strong, consistent, and growing
  • The stability of margins alongside steady revenue and profit growth underscores the resilience of its membership-based 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
  • Costco exhibits strong profitability and asset efficiency with ROE of 30.69% and ROA of 11.02%, but carries moderate financial leverage (Debt-to-Asset Ratio of 62.17%) and tight liquidity (Current Ratio of 1.03, Quick Ratio of 0.55) characteristic of inventory-intensive operations.
  • Current Ratio of 1.03 indicates the company can just cover its short-term liabilities with its short-term assets
  • Quick Ratio of 0.55 is notably low, suggesting a significant portion of current assets is tied up in inventory
  • The low Quick Ratio could pressure liquidity if inventory is not managed efficiently
  • Debt-to-Asset Ratio of 62.17% shows a moderate level of financial leverage
  • The leverage is common for large retailers utilizing debt for expansion and working capital
  • Financial leverage introduces interest rate and refinancing risks
  • Return on Equity (ROE) of 30.69% and Return on Assets (ROA) of 11.02% are standout figures
  • The high ROE and ROA demonstrate exceptional efficiency in generating profits from shareholder equity and company assets
  • The company exhibits strong profitability and asset efficiency but carries moderate financial leverage and tight liquidity
Leverage
2024Q32024Q42025Q12025Q22025Q3
Debt/Asset66.17%66.68%65.07%64.06%62.17%
Liquidity
2024Q32024Q42025Q12025Q22025Q3
Current ratio0.970.981.001.021.03