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Costco
(NASDAQ:COST)
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Rating:78Outperform
Price Target:
$1,053.00
▲(9.69% Upside)
Action:Reiterated
Date:09/29/26
The score is driven primarily by strong financial performance (healthy growth, improved leverage, and solid cash generation) and a constructive earnings-call read-through highlighting sustained comps, membership strength, and expansion/digital momentum. These positives are tempered by a weaker technical backdrop (negative MACD and price below key longer-term moving averages) and a less attractive valuation profile (high P/E with a low dividend yield).
Positive Factors
Recurring membership economics and high retention
Costco’s membership model provides recurring subscription revenue alongside merchandise sales, while high renewal rates indicate strong customer loyalty. Rising executive-member penetration and a growing cardholder base can support repeat visits, larger baskets, and durable earnings quality.
Negative Factors
Gross-margin pressure and higher inventory costs
Costco’s low-markup model leaves profitability sensitive to merchandise mix, inflation, and inventory-cost changes. Faster growth in gas, e-commerce, and pharmacy, together with higher LIFO charges, can constrain margin expansion even when sales growth remains strong.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring membership economics and high retention
Costco’s membership model provides recurring subscription revenue alongside merchandise sales, while high renewal rates indicate strong customer loyalty. Rising executive-member penetration and a growing cardholder base can support repeat visits, larger baskets, and durable earnings quality.
Read all positive factors
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 (COST) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$409.84B
Dividend Yield0.61%
Average Volume (3M)2.14M
Price to Earnings (P/E)32.9
Beta (1Y)0.36
Revenue Growth10.14%
EPS Growth13.92%
CountryUS
Employees341,000
SectorConsumer Defensive
Sector Strength42
IndustryDiscount Stores
Share Statistics
EPS (TTM)27.63
Shares Outstanding443,266,000
10 Day Avg. Volume2,717,884
30 Day Avg. Volume2,142,092
Financial Highlights & Ratios
PEG Ratio3.26
Price to Book (P/B)11.70
Price to Sales (P/S)1.38
P/FCF Ratio44.63
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$1,088.00Price Target Upside13.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering26
EPS Forecast (FY)22.66
Revenue Forecast (FY)$328.51B
Costco Business Overview & Revenue Model
Company Description
Costco Wholesale Corporation, alongside its group entities, operates membership-based retail warehouses across a broad international scope, spanning the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, South Korea, Australia,...
How the Company Makes Money
Costco primarily makes money through (1) membership fees and (2) merchandise and service sales.
1) Membership fees (recurring subscription revenue): Costco charges customers (households and businesses) annual fees to shop at its warehouses and ac...
Costco Earnings Call Summary
Earnings Call Date:Sep 24, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Dec 10, 2026
Earnings Call Sentiment Positive
The call was strongly positive overall. Costco reported double-digit sales and earnings growth, broad-based comparable-sales momentum, record or all-time-high performance in several operating and membership metrics, expanding digital engagement, and continued warehouse and infrastructure growth. The main challenges were lower reported gross margin, a significantly higher LIFO charge, membership-growth normalization, inflation and tariff uncertainty, and ongoing pharmacy pricing headwinds, but management described these issues as manageable and highlighted continued operating momentum.Positive Updates
Strong Quarterly Sales and Earnings Growth
Fourth-quarter net sales were $93.87 billion, up 11.2% from $84.43 billion in Q4 2025. Net income was $2.998 billion, or $6.75 per diluted share; excluding the $0.15 per-share nonrecurring tariff-refund benefit, net income and EPS increased 12.3% and 12.4%, respectively.
Negative Updates
Reported Gross Margin Decline
The reported gross-margin rate decreased 11 basis points year over year to 11.02% from 11.13%. Core-on-core gross margin was lower by 32 basis points, or lower by 9 basis points excluding gas inflation, primarily reflecting faster growth in gas, e-commerce, and pharmacy than in core merchandise.
Read all updates
Q4-2026 Updates
Positive
Negative
Strong Quarterly Sales and Earnings Growth
Fourth-quarter net sales were $93.87 billion, up 11.2% from $84.43 billion in Q4 2025. Net income was $2.998 billion, or $6.75 per diluted share; excluding the $0.15 per-share nonrecurring tariff-refund benefit, net income and EPS increased 12.3% and 12.4%, respectively.
Read all positive updates
Company Guidance
Costco’s current plan is to open another 33 warehouses in fiscal year 2027, of which 5 are relocations, including 4 buildings in Europe, 5 in Canada, and 1 in Mexico, as it builds towards its goal of opening 30 net new warehouses per year; management also said it has a path for the next 5 to 10 years of targeting that 30 new warehouses a year, with a strong pipeline planned for Asia, Australia, and other international markets in fiscal year '28. The company is planning approximately $7.5 billion in capital expenditure for fiscal year 2027 and would expect to see a slowing in the rate of capital expenditure growth beyond fiscal year 2027 following 3 years of outsized growth that began in fiscal year 2025. Costco does not give guidance on particular membership metrics, but said the growth rate seen in recent quarters is probably more typical of what it would expect to see based on current new-member sign-ups and renewal-rate normalization; inflation is difficult to predict, with the company describing the recent environment as relatively stable and noting that the coming 6 to 12 months could be materially affected by the situation in the Middle East and tariffs.Costco Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
88
Very Positive
Cash Flow
84
Very Positive
| Breakdown | Aug 2026 | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 303.15B | 275.24B | 254.45B | 242.29B | 226.95B |
| Gross Profit | 38.88B | 35.35B | 32.09B | 29.70B | 27.57B |
| EBITDA | 14.36B | 13.40B | 12.15B | 10.72B | 9.90B |
| Net Income | 9.23B | 8.10B | 7.37B | 6.29B | 5.84B |
Balance Sheet | |||||
| Total Assets | 89.05B | 77.10B | 69.83B | 68.99B | 64.17B |
| Cash, Cash Equivalents and Short-Term Investments | 21.30B | 15.28B | 11.14B | 15.23B | 11.05B |
| Total Debt | 8.58B | 10.22B | 9.95B | 10.54B | 10.91B |
| Total Liabilities | 53.24B | 47.94B | 46.21B | 43.94B | 43.52B |
| Stockholders Equity | 35.80B | 29.16B | 23.62B | 25.06B | 20.64B |
Cash Flow | |||||
| Free Cash Flow | 9.39B | 7.84B | 6.63B | 6.75B | 3.50B |
| Operating Cash Flow | 15.82B | 13.34B | 11.34B | 11.07B | 7.39B |
| Investing Cash Flow | -6.39B | -5.31B | -4.41B | -4.97B | -4.76B |
| Financing Cash Flow | -3.35B | -3.77B | -10.76B | -2.61B | -3.44B |
Costco Technical Analysis
Negative
960.01
Price Trends
933.43
Negative
953.23
Negative
958.94
Negative
Market Momentum
-5.80
Negative
46.22
Neutral
75.40
Neutral
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 960.01 is above the 20-day moving average (MA) of 908.62, above the 50-day MA of 933.43, and above the 200-day MA of 958.94, indicating a neutral trend. The MACD of -5.80 indicates Negative momentum. The RSI at 46.22 is Neutral, neither overbought nor oversold. The STOCH value of 75.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $409.84B | 32.95 | 28.02% | 0.61% | 10.14% | 13.92% | |
73 Outperform | $5.26B | 32.46 | 12.01% | 0.83% | 10.18% | 9.70% | |
69 Neutral | $12.06B | 19.96 | 27.35% | ― | 9.09% | 4.77% | |
68 Neutral | $71.07B | 16.19 | 26.66% | 2.92% | 1.95% | 12.49% | |
67 Neutral | $847.32B | 37.52 | 22.74% | 0.94% | 6.16% | 4.00% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
58 Neutral | $35.90B | 31.35 | 17.16% | 2.46% | 1.58% | -53.21% |
* Consumer Defensive Sector Average
COST
Costco
910.34
-1.68
-0.18%
KR
Kroger Company
58.62
-6.41
-9.86%
PSMT
Pricesmart
169.11
49.67
41.58%
TGT
Target
156.69
71.02
82.90%
WMT
Walmart
103.92
2.81
2.78%
BJ
Bj's Wholesale Club Holdings
92.00
1.24
1.37%
Costco Corporate Events
Business Operations and StrategyDividendsFinancial Disclosures
Costco Reports Strong June Sales and Dividend Declaration
Positive
Jul 8, 2026
In July 2026, Costco reported robust sales momentum, with net sales of $29.24 billion for the five-week retail month of June ended July 5, 2026, up 10.6% from a year earlier. Net sales for the first 44 weeks of its fiscal year reached $250.43 bill...
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.