Costco (COST)
NASDAQ:COST
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Costco
(NASDAQ:COST)
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Rating:72Outperform
Price Target:
$1,082.00
▲(9.60% Upside)
Action:ReiteratedDate:04/16/26
The score is driven primarily by strong financial performance (steady growth, high ROE, strong cash generation, and low leverage) and a constructive earnings outlook tied to expansion and digital momentum. Offsetting these positives are an expensive valuation (high P/E, low yield) and weaker near-term technical momentum despite a still-supportive longer-term trend.
Positive Factors
Membership revenue and retention
Costco’s membership model delivers recurring, high-margin-like revenue that funds operations while preserving low retail prices. Strong paid member growth and rising fee income provide predictable cash flow, support reinvestment and dividends, and underpin the company’s high operating profitability over time.
Negative Factors
Structurally low retail margins
Costco’s low-markup, high-volume model yields slim operating and net margins, leaving limited cushion against sustained cost inflation, tariff impacts, or SG&A increases. Small margin buffers make profitability more sensitive to persistent adverse cost shocks and constrain margin-expansion levers.
Read all positive and negative factors
Positive Factors
Negative Factors
Membership revenue and retention
Costco’s membership model delivers recurring, high-margin-like revenue that funds operations while preserving low retail prices. Strong paid member growth and rising fee income provide predictable cash flow, support reinvestment and dividends, and underpin the company’s high operating profitability over time.
Read all positive factors
Costco (COST) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$436.89B
Dividend Yield0.59%
Average Volume (3M)1.74M
Price to Earnings (P/E)55.5
Beta (1Y)0.52
Revenue Growth8.34%
EPS Growth9.58%
CountryUS
Employees333,000
SectorConsumer Defensive
Sector Strength42
IndustryDiscount Stores
Share Statistics
EPS (TTM)4.58
Shares Outstanding443,652,530
10 Day Avg. Volume1,689,729
30 Day Avg. Volume1,736,253
Financial Highlights & Ratios
PEG Ratio5.23
Price to Book (P/B)14.36
Price to Sales (P/S)1.52
P/FCF Ratio53.44
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue1.52
Enterprise Value/Gross Profit11.74
Enterprise Value/Ebitda30.88
Forecast
1Y Price Target
$1,099.22Price Target Upside11.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering23
EPS Forecast (FY)20.44
Revenue Forecast (FY)$298.74B
Costco Business Overview & Revenue Model
Company Description
Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiw...
How the Company Makes Money
Costco makes money through a combination of (1) membership fees and (2) merchandise and service sales, with membership fees being a major driver of operating profit because they are recurring and carry relatively low direct costs.
1) Membership f...
Costco Key Performance Indicators (KPIs)
Any
Memberships
Measures the number and composition of paid members (including Executive tier), reflecting the core recurring revenue base, customer loyalty, and the potential to drive store and ancillary sales per household.
Measures the number and composition of paid members (including Executive tier), reflecting the core recurring revenue base, customer loyalty, and the potential to drive store and ancillary sales per household.
Data provided by:
The Fly
The FlyCostco Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:May 28, 2026
Earnings Call Sentiment Positive
The call highlighted strong fundamental performance: double-digit digital growth, robust net sales and profit growth, membership strength, and continued investment in warehouses and digital capabilities. Headwinds were moderate and specific — gas price deflation, a small decline in U.S. renewal rates, higher SG&A/reserves, LIFO effects, tariff uncertainty and potential geopolitical risks to fuel/shipping. Overall, positives (healthy sales, margins on a core basis, digital acceleration, membership quality and capital plan) outweigh the contained challenges, supporting a constructive outlook.Positive Updates
Strong Profitability
Net income of $2.035 billion, up nearly 14% year-over-year; diluted EPS $4.58 versus $4.02 in prior-year quarter.
Negative Updates
Gas Price Deflation Headwind
Gas price deflation negatively impacted reported comps by approximately 0.7 percentage points in Q2 and ~85 basis points in February; gas comps were down mid-single digits and average worldwide selling price per gallon declined ~7.5% YoY in February.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Profitability
Net income of $2.035 billion, up nearly 14% year-over-year; diluted EPS $4.58 versus $4.02 in prior-year quarter.
Read all positive updates
Company Guidance
Costco’s forward-looking commentary emphasized expansion and investment: the company expects 28 net new warehouse openings in fiscal 2026 (bringing the global total to 924) and is targeting 30+ new openings per year thereafter (roughly just over half in the U.S. and just under half abroad), plans full‑year CapEx of about $6.5 billion (Q2 CapEx was $1.29 billion), and is rolling digital and in‑warehouse innovations (piloting automated pay stations with ~8‑second average transactions and digital personalization that has already driven >$470 million in e‑commerce sales) with digitally‑enabled comps running well ahead of total comps (~22% in Q2) and expected to continue growing faster than overall sales; management also warned egg deflation will remain a near‑term headwind for food & sundries, noted potential fuel/shipping risk from Middle East instability, and said it will transparently manage any tariff refund outcomes while continuing to reinvest efficiencies to lower prices and improve member retention (U.S. & Canada renewal rate 92.1%, worldwide 89.7%).Costco Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 | Aug 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 286.26B | 275.24B | 254.45B | 242.29B | 226.95B | 195.93B |
| Gross Profit | 37.00B | 35.35B | 32.09B | 29.70B | 27.57B | 25.25B |
| EBITDA | 14.07B | 13.40B | 12.15B | 10.72B | 9.90B | 8.63B |
| Net Income | 8.55B | 8.10B | 7.37B | 6.29B | 5.84B | 5.01B |
Balance Sheet | ||||||
| Total Assets | 83.64B | 77.10B | 69.83B | 68.99B | 64.17B | 59.27B |
| Cash, Cash Equivalents and Short-Term Investments | 18.24B | 15.28B | 11.14B | 15.23B | 11.05B | 12.18B |
| Total Debt | 8.24B | 8.17B | 8.27B | 8.88B | 9.04B | 10.13B |
| Total Liabilities | 51.55B | 47.94B | 46.21B | 43.94B | 43.52B | 41.19B |
| Stockholders Equity | 32.09B | 29.16B | 23.62B | 25.06B | 20.64B | 17.56B |
Cash Flow | ||||||
| Free Cash Flow | 9.10B | 7.84B | 6.63B | 6.75B | 3.50B | 5.37B |
| Operating Cash Flow | 15.01B | 13.34B | 11.34B | 11.07B | 7.39B | 8.96B |
| Investing Cash Flow | -5.87B | -5.31B | -4.41B | -4.97B | -4.76B | -3.54B |
| Financing Cash Flow | -4.24B | -3.77B | -10.76B | -2.61B | -3.44B | -6.49B |
Costco Technical Analysis
Positive
987.21
Price Trends
994.46
Negative
951.22
Positive
947.43
Positive
Market Momentum
0.73
Positive
47.20
Neutral
23.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COST, the sentiment is Positive. The current price of 987.21 is below the 20-day moving average (MA) of 992.48, below the 50-day MA of 994.46, and above the 200-day MA of 947.43, indicating a neutral trend. The MACD of 0.73 indicates Positive momentum. The RSI at 47.20 is Neutral, neither overbought nor oversold. The STOCH value of 23.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for COST.
Costco Risk Analysis
Costco disclosed 26 risk factors in its most recent earnings report. Costco reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Costco Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $436.89B | 55.55 | 28.81% | 0.59% | 8.34% | 9.58% | |
68 Neutral | $11.76B | 23.91 | 27.41% | ― | 2.82% | 3.77% | |
67 Neutral | $55.64B | 8.81 | 26.06% | 4.79% | -2.16% | -12.66% | |
67 Neutral | $994.64B | 56.03 | 23.69% | 0.85% | 4.34% | 17.27% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
56 Neutral | $19.99B | 11.56 | 34.83% | ― | -39.27% | -182.36% | |
55 Neutral | $26.77B | 20.87 | 18.66% | 1.88% | 4.86% | -4.51% |
* Consumer Defensive Sector Average
COST
Costco
987.21
-1.87
-0.19%
DG
Dollar General
123.47
32.25
35.36%
DLTR
Dollar Tree
99.93
20.28
25.46%
TGT
Target
123.91
34.88
39.18%
WMT
Walmart
124.82
32.42
35.09%
BJ
Bj's Wholesale Club Holdings
92.24
-21.78
-19.10%
Costco Corporate Events
Business Operations and StrategyDividends
Costco Increases Quarterly Dividend, Highlighting Shareholder Focus
Positive
Apr 15, 2026
Costco Wholesale Corporation announced on April 15, 2026, that its board approved a higher quarterly cash dividend on its common stock, raising the payout from $1.30 to $1.47 per share, or $5.88 on an annualized basis. The dividend is payable on M...
DividendsShareholder Meetings
Costco Shareholders Back Board, Approve Dividend Payout
Positive
Jan 21, 2026
At its January 15, 2026 Annual Meeting of Shareholders, Costco Wholesale Corporation reported strong shareholder support for its board nominees, the ratification of KPMG LLP as its independent auditor for fiscal 2026, and an advisory approval of e...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.