Costco (COST) AI Stock Analysis

• Market Cap: $394.64B
• Dividend Yield: 0.59%
• Average Volume (3M): 2.48M
• Price to Earnings (P/E): 47.6
• Beta (1Y): 0.57
• Revenue Growth: 8.34%
• EPS Growth: 9.58%
• Country: US
• Employees: 333,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Discount Stores
• EPS (TTM): 4.50
• Shares Outstanding: 443,869,420
• 10 Day Avg. Volume: 1,519,168
• 30 Day Avg. Volume: 2,483,088
• PEG Ratio: 5.23
• Price to Book (P/B): 14.36
• Price to Sales (P/S): 1.52
• P/FCF Ratio: 53.44
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 1.37
• Enterprise Value/Gross Profit: 10.67
• Enterprise Value/Ebitda: 28.09
• 1Y Price Target: $1,052.38
• Price Target Upside: 19.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 24
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: $982.00 ▲(11.26% Upside)

Costco's overall stock score is driven by strong financial performance and a favorable earnings call, highlighting robust growth and strategic expansion. However, technical analysis indicates bearish trends, and the valuation suggests the stock is overvalued, which tempers the overall score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion.

Digital Sales Expansion

The surge in digital sales reflects successful adaptation to e-commerce trends, enhancing Costco's competitive position in the digital retail space.

Membership Fee Income Growth

Growing membership fee income provides a stable and recurring revenue stream, reinforcing Costco's financial resilience and customer loyalty.

Negative Factors

Renewal Rate Decline

Declining renewal rates could signal challenges in retaining customers, potentially impacting future membership revenue and customer engagement.

Higher Healthcare Costs

Rising healthcare costs may pressure profit margins, challenging cost management and affecting long-term financial performance.

Challenges in Spain

Construction delays in Spain could hinder international expansion plans, affecting growth prospects and market penetration in Europe.

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 performance is strong, with consistent revenue growth, efficient cost management, and prudent leverage. The company maintains solid profitability and cash generation capabilities, positioning it well for future growth. Slightly increased debt levels are manageable, ensuring financial stability.

Income Statement

Costco's income statement reflects strong financial performance with consistent revenue growth and healthy profit margins. The TTM data shows a gross profit margin of 12.88% and a net profit margin of 2.96%, indicating efficient cost management. The revenue growth rate of 1.87% in the TTM period suggests steady expansion, albeit at a slower pace compared to previous years. Overall, the company maintains solid profitability and growth trajectory.

Balance Sheet

The balance sheet of Costco demonstrates financial stability with a low debt-to-equity ratio of 0.08 in the TTM period, highlighting prudent leverage management. The return on equity is robust at 29.61%, indicating effective use of shareholder funds. The equity ratio is strong, reflecting a solid capital structure. However, the slight increase in debt levels over the years warrants monitoring.

Cash Flow

Costco's cash flow statement shows positive trends with a 14.88% growth in free cash flow in the TTM period, indicating strong cash generation capabilities. The operating cash flow to net income ratio is healthy, suggesting efficient conversion of earnings into cash. The free cash flow to net income ratio of 0.61 further supports the company's ability to generate cash relative to its earnings. Overall, Costco's cash flow position is strong, supporting its operational and strategic initiatives.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	275.24B	254.45B	242.29B	226.95B	195.93B
Gross Profit	35.35B	32.09B	29.70B	27.57B	25.25B
EBITDA	13.40B	12.15B	11.14B	10.28B	8.92B
Net Income	8.10B	7.37B	6.29B	5.84B	5.01B
Balance Sheet
Total Assets	77.10B	69.83B	68.99B	64.17B	59.27B
Cash, Cash Equivalents and Short-Term Investments	15.28B	11.14B	15.23B	11.05B	12.18B
Total Debt	8.17B	8.27B	8.88B	9.04B	10.13B
Total Liabilities	47.94B	46.21B	43.94B	43.52B	41.19B
Stockholders Equity	29.16B	23.62B	25.06B	20.64B	17.56B
Cash Flow
Free Cash Flow	7.84B	6.63B	6.75B	3.50B	5.37B
Operating Cash Flow	13.34B	11.34B	11.07B	7.39B	8.96B
Investing Cash Flow	-5.31B	-4.41B	-4.97B	-4.76B	-3.54B
Financing Cash Flow	-3.77B	-10.76B	-2.61B	-3.44B	-6.49B

Costco Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 882.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COST, the sentiment is Neutral. The current price of 882.58 is above the 20-day moving average (MA) of 868.82, below the 50-day MA of 894.76, and below the 200-day MA of 948.50, indicating a neutral trend. The MACD of -5.63 indicates Negative momentum. The RSI at 51.96 is Neutral, neither overbought nor oversold. The STOCH value of 84.11 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for COST.

Costco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WMT	76 Outperform	$911.31B	40.10	24.87%	0.85%	4.34%	17.27%
DG	73 Outperform	$31.85B	24.98	16.45%	1.88%	4.86%	-4.51%
COST	72 Outperform	$394.64B	47.63	30.32%	0.59%	8.34%	9.58%
BJ	71 Outperform	$11.89B	20.32	29.24%	―	2.82%	3.77%
TGT	70 Neutral	$47.23B	12.66	25.09%	4.79%	-2.16%	-12.66%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
DLTR	61 Neutral	$26.60B	-9.77	20.07%	―	-39.27%	-182.36%

Costco Corporate Events

Costco Sets 2026 Executive Bonus Criteria

On October 14, 2025, Costco‘s Board of Directors approved the fiscal 2026 bonus criteria for executive officers, emphasizing sales, pre-tax income, and environmental and social performance. Executive officers, excluding the CEO, can earn up to $371,200, while the CEO’s potential bonus is $1.12 million, with both having a portion tied to environmental and social objectives.

The most recent analyst rating on (COST) stock is a Buy with a $1115.00 price target. To see the full list of analyst forecasts on Costco stock, see the COST Stock Forecast page.

Costco Announces Quarterly Cash Dividend of $1.30

On October 15, 2025, Costco Wholesale Corporation announced a quarterly cash dividend of $1.30 per share, payable on November 14, 2025, to shareholders of record as of October 31, 2025. This announcement reflects Costco’s ongoing commitment to returning value to its shareholders and may positively impact investor sentiment, reinforcing its strong position in the retail industry.

The most recent analyst rating on (COST) stock is a Buy with a $1140.00 price target. To see the full list of analyst forecasts on Costco stock, see the COST Stock Forecast page.