Costco (COST) AI Stock Analysis

• Market Cap: $418.34B
• Dividend Yield: 0.52%
• Average Volume (3M): 2.20M
• Price to Earnings (P/E): 53.5
• Beta (1Y): 0.61
• Revenue Growth: 5.94%
• EPS Growth: 9.31%
• Country: US
• Employees: 333,000
• Sector: Consumer Defensive
• Sector Strength: 48
• Industry: Discount Stores
• EPS (TTM): 4.28
• Shares Outstanding: 443,477,080
• 10 Day Avg. Volume: 2,345,902
• 30 Day Avg. Volume: 2,197,521
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 1.76
• Enterprise Value/Gross Profit: 13.74
• Enterprise Value/Ebitda: 40.75
• 1Y Price Target: $1,100.33
• Price Target Upside: 17.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19

• Rating: 80 Outperform
• Price Target: $1,114.00 ▲(18.66% Upside)

Costco's overall stock score is driven by strong financial performance and positive earnings call sentiment. While the technical analysis is neutral, and the valuation suggests a high price relative to earnings, the company's strategic growth initiatives and robust financial health support a positive outlook.

Positive Factors

Earnings Growth

The valuation is supported by the extraordinary duration in Costco’s earnings growth.

International Expansion

International markets will drive store and membership growth.

Negative Factors

Cannibalization Impact

Cannibalization impacted international same-store sales results, indicating potential challenges in growth within certain markets.

Traffic and Growth Challenges

Traffic growth was softer in May and June compared to earlier in the year, possibly influenced by macroeconomic factors.

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 Taiwan. It offers branded and private-label products in a range of merchandise categories. The company offers sundries, dry groceries, candies, coolers, freezers, liquor, and tobacco and deli products; appliances, electronics, health and beauty aids, hardware, garden and patio products, sporting goods, tires, toys and seasonal products, office supplies, automotive care products, postages, tickets, apparel, small appliances, furniture, domestics, housewares, special order kiosks, and jewelry; and meat, produce, service deli, and bakery products. It also operates pharmacies, opticals, food courts, hearing-aid centers, and tire installation centers, as well as 636 gas stations; and offers business delivery, travel, same-day grocery, and various other services online in various countries. As of August 29, 2021, the company operated 815 membership warehouses, including 564 in the United States and Puerto Rico, 105 in Canada, 39 in Mexico, 30 in Japan, 29 in the United Kingdom, 16 in South Korea, 14 in Taiwan, 12 in Australia, 3 in Spain, 1 in Iceland, 1 in France, and 1 in China. It also operates e-commerce websites in the United States, Canada, the United Kingdom, Mexico, South Korea, Taiwan, Japan, and Australia. The company was formerly known as Costco Companies, Inc. and changed its name to Costco Wholesale Corporation in August 1999. Costco Wholesale Corporation was founded in 1976 and is based in Issaquah, Washington.

How the Company Makes Money

Costco generates revenue primarily through its membership fees and the sale of goods. Members pay an annual fee to access the warehouse clubs, which provides a steady income stream. In addition, the company earns significant revenue from the sale of a wide range of products, including groceries, electronics, and household items, often at lower prices than traditional retailers due to its bulk purchasing and efficient operations. The company also benefits from ancillary revenue streams such as its pharmacy, optical, and travel services. Costco's strong focus on customer satisfaction and low prices fosters member loyalty, leading to a high renewal rate for memberships, which further contributes to its financial success.

Costco Financial Statement Overview

Summary

Costco's financial statements reflect strong revenue growth, stable gross profit margins, and improved net profit margins. The balance sheet shows a healthy equity position and low debt-to-equity ratio, indicating financial stability. Cash flow from operations is robust, supporting operational sustainability and reinvestment capability.

Income Statement

Costco has demonstrated strong revenue growth over the years, with a significant increase from $166.76B in 2020 to $268.78B in TTM 2025. Gross profit margin has remained stable, currently at 13.38% in TTM 2025, indicating operational efficiency. The net profit margin has shown a steady upward trend, reaching 2.92% in TTM 2025, reflecting improved profitability. EBIT and EBITDA margins have also improved, indicating effective cost management.

Balance Sheet

Costco maintains a healthy balance sheet with a strong equity position; the equity ratio is 35.94% in TTM 2025. The company has managed its debt well, maintaining a low debt-to-equity ratio of 0.30, which suggests financial stability. Return on equity is robust at 28.91% in TTM 2025, indicating effective use of equity to generate profit.

Cash Flow

Costco's cash flow from operations has shown consistent growth, and free cash flow has improved significantly, with a 10.4% increase from 2024 to TTM 2025. The operating cash flow to net income ratio of 1.58 in TTM 2025 indicates strong cash generation relative to net income, supporting operational sustainability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	268.78B	254.45B	242.29B	226.95B	195.93B	166.76B
Gross Profit	34.34B	32.09B	29.70B	27.57B	25.25B	21.82B
EBITDA	11.58B	12.15B	11.14B	10.28B	8.92B	7.37B
Net Income	7.84B	7.37B	6.29B	5.84B	5.01B	4.00B
Balance Sheet
Total Assets	75.48B	69.83B	68.99B	64.17B	59.27B	55.56B
Cash, Cash Equivalents and Short-Term Investments	14.85B	11.14B	15.23B	11.05B	12.18B	13.30B
Total Debt	8.18B	8.27B	8.88B	9.04B	10.13B	10.17B
Total Liabilities	48.36B	46.21B	43.94B	43.52B	41.19B	36.85B
Stockholders Equity	27.13B	23.62B	25.06B	20.64B	17.56B	18.28B
Cash Flow
Free Cash Flow	7.32B	6.63B	6.75B	3.50B	5.37B	6.05B
Operating Cash Flow	12.43B	11.34B	11.07B	7.39B	8.96B	8.86B
Investing Cash Flow	-5.05B	-4.41B	-4.97B	-3.92B	-3.54B	-3.89B
Financing Cash Flow	-4.00B	-10.76B	-2.61B	-4.28B	-6.49B	-1.15B

Costco Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 938.82
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COST, the sentiment is Negative. The current price of 938.82 is below the 20-day moving average (MA) of 965.97, below the 50-day MA of 964.74, and below the 200-day MA of 973.13, indicating a bearish trend. The MACD of -5.87 indicates Positive momentum. The RSI at 39.31 is Neutral, neither overbought nor oversold. The STOCH value of 13.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for COST.

Costco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
COST	80 Outperform	$418.34B	53.51	32.08%	0.52%	5.94%	9.31%
WMT	73 Outperform	$773.94B	36.92	24.46%	0.93%	4.23%	38.05%
TGT	72 Outperform	$43.61B	10.78	26.32%	4.87%	-1.55%	-11.41%
DG	71 Outperform	$23.94B	20.12	15.60%	2.14%	4.98%	-15.98%
BJ	66 Neutral	$12.87B	22.64	30.84%	―	2.48%	9.41%
Sector *	63 Neutral	$20.41B	14.67	-2.93%	3.10%	2.04%	-6.12%
DLTR	58 Neutral	$22.78B	―	19.25%	―	-20.46%	-202.26%

Costco Corporate Events

Costco Announces Leadership Change in U.S. and Mexico

On August 4, 2025, Costco announced the retirement of Russ Miller, Senior Executive Vice President, COO – U.S. and Mexico Operations, effective February 2026. Caton Frates will succeed him, taking on the role of Senior Executive Vice President, Warehouse Operations – U.S. and Mexico, which may impact the company’s operational strategies in these regions.

Costco Declares Quarterly Cash Dividend of $1.30

On July 16, 2025, Costco Wholesale Corporation announced a quarterly cash dividend of $1.30 per share, declared on July 15, 2025, and payable on August 15, 2025, to shareholders of record as of August 1, 2025. This announcement reflects Costco’s ongoing commitment to returning value to its shareholders and may positively impact its market positioning by reinforcing investor confidence.

Costco Announces Leadership Change in Accounting Roles

Costco announced that Dan Hines will retire as Senior Vice President, Corporate Controller, and Principal Accounting Officer on June 30, 2025, after 35 years of service. Tiffany Barbre will succeed him in these roles effective July 1, 2025, bringing her extensive experience within the company since 2005. Her appointment is expected to ensure continuity in Costco’s financial leadership, with her compensation package reflecting her new responsibilities.