Costco (COST) AI Stock Analysis

• Market Cap: $435.53B
• Dividend Yield: 0.54%
• Average Volume (3M): 2.08M
• Price to Earnings (P/E): 55.0
• Beta (1Y): 0.65
• Revenue Growth: 5.94%
• EPS Growth: 9.31%
• Country: US
• Employees: 333,000
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Discount Stores
• EPS (TTM): 4.28
• Shares Outstanding: 443,477,080
• 10 Day Avg. Volume: 1,789,341
• 30 Day Avg. Volume: 2,078,780
• PEG Ratio: 19.06
• Price to Book (P/B): 16.04
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 59.41
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 0.41
• Enterprise Value/Gross Profit: 11.93
• Enterprise Value/Ebitda: 9.09
• 1Y Price Target: $1,097.32
• Price Target Upside: 13.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 23

• Rating: 77 Outperform
• Price Target: $1,115.00 ▲(14.93%Upside)

Costco's strong financial performance and positive earnings call contribute significantly to the overall score. While technical indicators suggest some short-term weakness, the company's strategic initiatives and long-term growth potential are compelling. The high P/E ratio is a concern, but the overall outlook remains positive.

Positive Factors

E-commerce growth

E-commerce sales were +11.2% ex-FX, indicating a robust growth in the online segment.

International sales performance

Both Canada and Other International core comps came in well ahead of Street estimates at +7.9% and +8.2%, respectively.

Membership value proposition

Costco's new perks for Executive members, including Instacart credits and extended shopping hours, highlight its strong membership value proposition and support its premium valuation.

Negative Factors

Cannibalization impact

The cannibalization headwind in June receded slightly to 60 bps, indicating ongoing challenges in certain markets.

Stock performance

Shares have been relatively stagnant over the past month as investors increasingly favor more risky names.

Traffic 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 (COST) is a leading global retailer operating membership-only warehouse clubs. Founded in 1983 and headquartered in Issaquah, Washington, Costco offers a wide range of merchandise, including groceries, electronics, apparel, and home goods. The company operates in various sectors, providing high-quality products at competitive prices to its members through its vast network of warehouses across multiple countries.

How the Company Makes Money

Costco makes money primarily through the sale of goods and services in its retail warehouses and online platform. The company's revenue model is built on offering products in bulk at low prices, which is made possible by efficient supply chain management and high inventory turnover. A significant portion of Costco's revenue comes from membership fees, which provide a steady and predictable income stream. These fees are crucial as they drive customer loyalty and help offset operational costs, enabling the company to maintain its competitive pricing strategy. Additionally, Costco has strategic partnerships with manufacturers and suppliers, allowing for exclusive product offerings and improved margins. The company's earnings are further supported by ancillary businesses, including gas stations, optical centers, pharmacies, and food courts within its warehouses.

Costco Financial Statement Overview

Summary

Costco's financial statements reflect a well-managed and financially robust company. The income statement highlights strong revenue and profit growth, supported by effective cost control and margin improvement. The balance sheet shows a solid equity base and prudent debt management, while cash flow statements indicate strong cash generation 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	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	268.78B	254.45B	242.29B	226.95B	195.93B	166.76B
Gross Profit	35.97B	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	-3.44B	-6.49B	-1.15B

Costco Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 970.17
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• 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 970.17 is below the 20-day moving average (MA) of 985.85, below the 50-day MA of 1004.27, and above the 200-day MA of 963.16, indicating a neutral trend. The MACD of -7.34 indicates Positive momentum. The RSI at 38.85 is Neutral, neither overbought nor oversold. The STOCH value of 19.59 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	77 Outperform	$435.53B	55.03	32.08%	0.54%	5.94%	9.31%
DG	77 Outperform	$24.72B	21.41	15.69%	2.10%	4.77%	-23.73%
BJ	75 Outperform	$14.20B	24.81	32.76%	―	2.84%	11.25%
WMT	74 Outperform	$772.58B	40.69	22.80%	0.99%	4.22%	-0.17%
TGT	66 Neutral	$46.54B	11.51	29.08%	4.28%	-0.69%	2.03%
Sector *	63 Neutral	$16.70B	11.33	-6.96%	2.94%	1.73%	-24.85%
DLTR	60 Neutral	$21.86B	―	19.25%	―	-20.46%	-202.26%

Costco Corporate Events

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.

The most recent analyst rating on (COST) stock is a Buy with a $975.00 price target. To see the full list of analyst forecasts on Costco stock, see the COST Stock Forecast page.