The author argues Costco looks overvalued, with a P/E of 49 that is 109% above the S&P 500 and 82% above Nvidia, despite 584% share gains over the past decade. Applying a fair P/E of 30 to last fiscal year's earnings gives a fair value of $623, a 43% discount to the record high of $1,094.32 set in May 2026. Growth drivers cited include 25 net new warehouses opened in fiscal 2026, a target of 30 openings a year, 84.1 million member households, a 92% U.S. and Canada renewal rate and past membership fee hikes. Assuming EPS growth slows to 12% a year, the author projects that a $5,000 investment could grow to $15,530 in 10 years, with the stock at $1,935 in October 2036, a hypothetical 12% annualized return. The article notes the premium valuation could persist if the company keeps performing well.
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- Is Now a Good Time to Buy Costco Stock?
The article argues that patient long-term investors have been rewarded by Costco, whose share price gained 104.2% over the past five years through Oct. 27, versus 69% for the S&P 500. In the latest fiscal year, which ended in late August, Costco kept a renewal rate of almost 90%, grew paid members about 4% to 84.1 million, and opened 25 warehouses, bringing its total to 939. Operating income rose 12.5% year over year to $11.7 billion. However, the stock trades at a price-to-earnings ratio of 48, compared with a 10-year median of 38, meaning it is not cheaply valued. The author argues that paying a rich valuation for a profitably growing company is better than paying a lower one for a company with less-than-stellar prospects, and favors buying and holding the stock for the long term.
- Prediction: $5,000 in Costco Stock Will Trail the Market Through 2030
The author estimates $5,000 in Costco stock could grow to about $6,350 by the end of 2030, while the same amount in an S&P 500 index fund might reach about $7,450. The forecast assumes earnings per share grow about 11% a year to roughly $31.30 in fiscal 2030 and a price-to-earnings ratio of 40 times by the end of 2030, down from about 49 times today. The author notes membership fee income growth has slowed to about 7% by the fiscal fourth quarter, after the fee hike that took effect Sept. 1, 2024. The author still considers Costco one of the best retailers to own for the long run but does not expect the stock to beat an index fund from current levels.
- Are You Overpaying For Costco Stock Versus Its Rivals?
Costco shares trade at 47.9 times earnings, well above Amazon's 20.9 and Walmart's 42.8 among six large retailers. Costco's revenue grew 10.1% over the latest four quarters, slower than Amazon's 15.8%, and its 3.9% operating margin trails Amazon's 12.1%. The article suggests the premium may reflect steady membership fee income: $1.849 billion in fiscal Q4, nearly half of the $3.8 billion operating income, with 92.3% of U.S. and Canadian members renewing. Costco plans about $7.5 billion of capital spending in fiscal 2027, mainly for new warehouses, while paid members grew 3.8% year over year.
- Costco (COST) vs. Walmart (WMT): Which Retailing Giant Has a Wider Moat?
Costco (COST) and Walmart (WMT) have returned -0.71% and -5.38%, respectively, over the six months to October 15. Costco keeps customers returning through its membership model, low prices and the Kirkland Signature brand, while Walmart can grow its e-commerce, advertising and third-party marketplace by leveraging its large customer base and store network. Costco posted fiscal 2026 revenue of $303.2 billion, including $5.9 billion from membership fees, and net income up 14% to $9.2 billion; it ended the year with 84.1 million paid members and a 92.3% renewal rate in the US and Canada. In fiscal Q2 2027, Walmart's global e-commerce sales rose 23% and advertising rose 38%, yet Walmart US comparable sales grew only 2.6%. Costco trades at 40.32x forward earnings versus 38.02x for Walmart.
- Costco Wholesale Has Fallen More Than 10 % From Its Peak Before . Here What History Says Happens Next .
Costco's stock, down 10% or more from its peak, has historically set a new high within a year, though two recent cases were exceptions. Over the past 10 years it fell 10% or more seven times before this decline; in five of them it set a new record within 12 months, and all seven recovered, the slowest in about 19 months. The two most recent drops lasted far longer: the 31.5% slide from April 2022's high took until December 2023 to recover, while the decline that began in February 2025 lasted until May 2026. With a P/E of 47.3 versus a 10-year average of 40 and slowing comparable-warehouse sales growth (8.8% in June versus 12.5% in May), the author thinks a new high within 12 months is less likely than the record implies, but still considers the dip a chance for long-term holders to buy more shares.
- Costco Wholesale Has Fallen More Than 10 % From Its Peak Before . Here What History Says Happens Next .
Costco (COST) is more than 10% below its peak, but the article notes such declines have historically been followed by a new record high within a year, though two recent exceptions stand out. Over the past 10 years the stock had seven drops of 10% or more before this one, five of which reached a new high within 12 months, and all seven eventually recovered. The two most recent declines took longer: the slide from the April 2022 high did not recover until December 2023, and the decline that began in February 2025 lasted until May 2026. The author points to slowing comparable sales, which rose 8.8% in June 2026 versus 12.5% in May, and a P/E of 47.3, still above its 10-year average of 40, as reasons a new high within 12 months looks less likely.
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