Business 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, Spain, France, Iceland, China, and Taiwan. These outlets provide customers with an extensive array of both well-known branded and proprietary private-label products. Their vast inventory includes household staples, shelf-stable groceries, confectionery, chilled and frozen items, alcoholic beverages, tobacco, and deli selections. Furthermore, the stores stock major appliances, consumer electronics, health and beauty aids, hardware, garden and patio furniture, sporting goods, vehicle tires, toys, seasonal merchandise, office supplies, automotive maintenance products, postage services, event tickets, apparel, small kitchen appliances, home furnishings, domestic textiles, kitchenware, custom-order kiosks, and fine jewelry. Fresh departments offer meat, produce, a service deli, and bakery items. Beyond retail goods, Costco provides in-store amenities such as pharmacies, optical clinics, food courts, hearing aid centers, and tire installation facilities, in addition to managing 636 gas stations. The company also extends its offerings online through business delivery, travel booking, and same-day grocery fulfillment in various countries. As of August 29, 2021, Costco maintained a global network of 815 membership warehouses, with 564 located 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, and one each in Iceland, France, and China. Digital storefronts facilitate e-commerce operations in the United States, Canada, the United Kingdom, Mexico, South Korea, Taiwan, Japan, and Australia. Founded in 1976, the enterprise was originally known as Costco Companies, Inc. before officially adopting the name Costco Wholesale Corporation in August 1999. Its corporate headquarters are situated in Issaquah, Washington.
Business History
Generated: Jun 24, 2026 3:02amPrice Overview
Last updated: Jun 24, 2026 3:00am (3d ago)Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 18.24
Total Equity: $29.16B
Shares: 444,803,000
Total Debt: $5.71B
Cash: $14.16B
EBITDA: $13.40B
Total Debt: $5.71B
Cash: $14.16B
Revenue: $275.24B
Revenue: $275.24B
Revenue: $275.24B
Total Equity: $29.16B
Tax Rate: 25.1%
Equity: $29.16B
Total Debt: $5.71B
Cash: $14.16B
Current Liabilities: $37.11B
Long-Term Debt: $5.71B
Total Debt: $5.71B
Total Equity: $29.16B
Shares: 444,803,000
Shares: 444,803,000
CapEx: -$5.50B
Shares: 444,803,000
Stock Price: $957.68
Net Income: $8.10B
Industry Benchmarks
Advanced Analysis Forensic deep-dive · three lenses
Revenue compounded from $195.9B (2021) to $275.2B (2025), roughly a 9% CAGR, with operating margin quietly expanding from 3.4% to 3.8% and gross margin recovering from a 12.1% trough in 2022 to 12.8% in 2025. Net income rose from $5.01B to $8.10B (over 60% in four years) on a diluted share count that barely moved (444.3M to 444.8M). For a low-margin membership warehouse model at this scale, the operating leverage and discipline shown here are elite. Earnings quality is pristine: OCF/NI of 1.6x, accruals at -5.7% of assets, Beneish M of -2.66, and Altman Z of 9.76 indicate the reported numbers are backed by cash, not accrual gymnastics. FCF reached $7.84B in 2025 (2022's $3.50B dip looks like working-capital noise during the post-COVID inventory swing, since it normalized immediately). Liquidity is ample with $15.28B cash and $9.57B net cash; the business self-funds growth and a special dividend cadence without leaning on capital markets. Dilution is essentially nil (SBC 0.3% of revenue, buyback/SBC 83.7%), so per-share value is protected. Insider activity is routine programmatic selling and tax-withholding with zero open-market buys, but no unusual cluster or magnitude that would flag concern given executive comp structure. The moat (membership renewal rates, scale-driven unit economics, treasure-hunt SKU curation) is implied by the consistent margin expansion despite inflationary cost pressure.
Verify before trusting this (5)
- Membership renewal rate trend (US/Canada and worldwide) in latest 10-K to confirm moat strength
- Membership fee revenue as share of operating income to gauge true unit economics
- Any change in supplier concentration or private-label (Kirkland) mix disclosed in MD&A
- Capex cadence and warehouse openings vs. same-store sales contribution
- Executive compensation structure to confirm insider sales are programmatic rather than discretionary
Costco trades at roughly 50x forward earnings and ~1.5x sales for a retailer growing comps mid-single digits. Even granting the fortress quality grade and high earnings quality (no haircut needed), a generous DCF on ~8-9% revenue growth, modest margin expansion, and a terminal multiple consistent with consumer staples compounders lands deserved value in the $700-800 range. At $957.68, the market is capitalizing the membership annuity, club rollout optionality, and continued mix shift as if all three compound flawlessly for a decade. The e2e synthesis flagging 'Priced for Perfection' matches the tape.
Verify before trusting this (4)
- Next membership fee hike cadence and renewal rate trend
- US comp ex-gas/FX trajectory vs guidance
- International club opening pace and unit economics
- Any special dividend signaling excess capital return vs reinvestment
The macro tape is roughly neutral (VIX 19.5, S&P -3% off highs) and Costco's 0.87 beta plus consumer-defensive status mean any tape pressure lands softly here. The active narrative is the most important input: a moderate-intensity, durable 'secular compounder with membership moat' story with medium cult coefficient. That story is being actively reinforced by news flow - today's headlines explicitly frame Costco as 'proving critics wrong' amid a shaky economy, and broader retail sentiment got a bid from a strong 0.9% MoM retail sales print. Defensive quality names tend to attract bids in exactly this kind of uncertain-but-not-panicked tape. Analyst tone is constructive and not stretched relative to the narrative: 38 Buys vs 19 Holds, consensus target $1,110 (~16% above spot), and two upward revisions this month averaging $1,055 - so the sell-side is nudging higher, not capitulating. The only real headwind pressing on this specific name is the well-known multiple worry (30-35x forward) which becomes a live risk if rates back up further from 4.5% or if the tape rolls into outright risk-off; for now that is latent, not active. Net pressure leans positive but not euphoric.
Verify before trusting this (5)
- 10y yield direction - a move toward 4.75-5% would crack the high-multiple defensive bid
- VIX behavior - a break above 22-24 would shift tape from neutral to risk-off and start to weigh even on low-beta names
- Any monthly comp-sales miss that would let the bear 'saturation' counter-narrative get traction
- Continued pace of analyst target revisions - a stall or reversal would be the first sentiment crack
- Membership renewal commentary on next earnings - the linchpin of the moat narrative
Deep Analysis
Pre-flight intelligence scans the company first, then routes to the right analytical methods.
Income Statement (Annual)
Last updated: Jun 24, 2026 3:03am (3d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $195.9B | $227.0B | $242.3B | $254.5B | $275.2B |
| Cost of Revenue | $170.7B | $199.4B | $212.6B | $222.4B | $239.9B |
| Gross Profit | $25.2B | $27.6B | $29.7B | $32.1B | $35.3B |
| Operating Expenses | $18.5B | $19.8B | $21.6B | $22.8B | $25.0B |
| Operating Income | $6.7B | $7.8B | $8.1B | $9.3B | $10.4B |
| Net Income | $5.0B | $5.8B | $6.3B | $7.4B | $8.1B |
| EBITDA | $8.6B | $9.9B | $10.7B | $12.1B | $13.4B |
| EPS | $11.30 | $13.17 | $14.18 | $16.60 | $18.24 |
| EPS (Diluted) | — | — | — | — | — |
Balance Sheet (Annual)
Last updated: Jun 24, 2026 3:00am (3d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $11.3B | $10.2B | $13.7B | $9.9B | $14.2B |
| Total Current Assets | $29.5B | $32.7B | $35.9B | $34.2B | $38.4B |
| Total Assets | $59.3B | $64.2B | $69.0B | $69.8B | $77.1B |
| Current Liabilities | $29.4B | $32.0B | $33.6B | $35.5B | $37.1B |
| Long-Term Debt | $6.7B | $6.5B | $5.4B | $5.8B | $5.7B |
| Total Liabilities | $41.2B | $43.5B | $43.9B | $46.2B | $47.9B |
| Total Equity | $17.6B | $20.6B | $25.1B | $23.6B | $29.2B |
| Retained Earnings | $11.7B | $15.6B | $19.5B | $17.6B | $22.7B |
Cash Flow (Annual)
Last updated: Jun 22, 2026 3:04am (5d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $9.0B | $7.4B | $11.1B | $11.3B | $13.3B |
| Capital Expenditure | -$3.6B | -$3.9B | -$4.3B | -$4.7B | -$5.5B |
| Free Cash Flow | $5.4B | $3.5B | $6.7B | $6.6B | $7.8B |
| Acquisitions (net) | $0 | -$842.0M | $0 | $0 | $0 |
| Debt Repayment | — | — | — | — | — |
| Dividends Paid | — | — | — | — | — |
| Stock Buybacks | -$496.0M | -$439.0M | -$676.0M | -$700.0M | -$903.0M |
| Net Change in Cash | -$1.0B | -$1.1B | $3.5B | -$3.8B | $4.3B |
Analyst Estimates (Annual)
Last updated: Jun 24, 2026 3:00am (3d ago)| Metric | 2027 | 2028 | 2029 | 2030 |
|---|---|---|---|---|
| Revenue |
$326.8B $317.6B – $334.4B
|
$351.0B $350.4B – $351.6B
|
$373.0B $364.7B – $379.4B
|
$394.5B $385.7B – $401.3B
|
| EBITDA |
$18.1B $17.6B – $18.5B
|
$19.4B $19.4B – $19.4B
|
$20.6B $20.2B – $21.0B
|
$21.8B $21.3B – $22.2B
|
| Net Income |
$10.1B $9.7B – $10.5B
|
$11.1B $10.5B – $11.9B
|
$12.0B $11.7B – $12.3B
|
$12.7B $12.3B – $13.0B
|
| EPS | — | — | — | — |
Growth Trends (YoY %)
Last updated: Jun 24, 2026 3:03am (3d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +15.8% | +6.8% | +5.0% | +8.2% |
| Gross Profit Growth | +9.2% | +7.7% | +8.0% | +10.1% |
| Operating Income Growth | +16.2% | +4.1% | +14.4% | +11.8% |
| Net Income Growth | +16.7% | +7.7% | +17.1% | +9.9% |
| EBITDA Growth | +14.7% | +8.3% | +13.3% | +10.3% |
Insider Trading (Recent)
Last updated: Jun 24, 2026 3:03am (3d ago)All SEC Form 4 codes
- P Purchase
- Open-market or private purchase of shares.
- S Sale
- Open-market or private sale of shares.
- A Award / grant
- Grant or award of securities (RSUs, options, etc.) under Rule 16b-3.
- D Return to issuer
- Securities disposed back to the company under Rule 16b-3.
- F In-kind (tax)
- Shares withheld or delivered to pay the option-exercise price or tax — not an open-market sale.
- I Discretionary
- Discretionary transaction under an employee plan — Rule 16b-3(f).
- M Option exercise
- Exercise or conversion of a derivative (option/RSU) into shares — exempt.
- C Conversion
- Conversion of a derivative security into the underlying shares.
- E Short expiration
- Expiration of a short derivative position.
- H Long expiration
- Expiration or cancellation of a long derivative position with value received.
- O OTM exercise
- Exercise of an out-of-the-money derivative.
- X ITM exercise
- Exercise of an in-the-money or at-the-money derivative.
- G Gift
- Bona fide gift of securities.
- L Small acquisition
- Small acquisition under Rule 16a-6.
- W Inheritance
- Acquisition or disposition by will or the laws of descent.
- Z Voting trust
- Deposit into or withdrawal from a voting trust.
- J Other
- Other acquisition or disposition (explained in a Form 4 footnote).
- K Equity swap
- Transaction in an equity swap or similar instrument.
- U Tender / buyout
- Disposition via tender of shares in a change-of-control transaction.
Compensation-plan codes (A, D, F, M) are routine and rarely directional. Open-market P (buy) and S (sale) carry the most signal.
| Date | Insider | Type | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-23 | DENMAN KENNETH D | S-Sale | 885.00 | $957.45 | $847,345 |
| 2026-03-02 | George Sarah Catherine | 0.00 | $0.00 | $0 | |
| 2026-04-01 | Frates Caton | S-Sale | 700.00 | $993.00 | $695,100 |
| 2026-03-12 | George Sarah Catherine | I-Discretionary | 642.13 | $991.21 | $636,483 |
| 2026-03-11 | MILLERCHIP GARY | F-InKind | 1,154.02 | $992.23 | $1.1M |
| 2026-03-02 | George Sarah Catherine | 0.00 | $0.00 | $0 | |
| 2026-03-02 | George Sarah Catherine | 0.00 | $0.00 | $0 | |
| 2026-03-09 | Adamo Claudine | S-Sale | 730.00 | $1,003.02 | $732,205 |
| 2026-01-27 | RAIKES JEFFREY S | G-Gift | 5,115.00 | $0.00 | $0 |
| 2026-01-27 | Jones Teresa A. | G-Gift | 300.00 | $0.00 | $0 |
| 2026-01-21 | Jones Teresa A. | S-Sale | 850.00 | $986.26 | $838,318 |
| 2026-01-16 | DECKER SUSAN L | S-Sale | 458.00 | $955.00 | $437,390 |
| 2026-01-16 | Raimondo Gina Marie | A-Award | 215.00 | $0.00 | $0 |
| 2026-01-15 | Raimondo Gina Marie | 0.00 | $0.00 | $0 | |
| 2026-01-14 | Klauer James C | S-Sale | 1,500.00 | $939.00 | $1.4M |
| 2026-01-09 | Miller Russell D | S-Sale | 1,500.00 | $916.32 | $1.4M |
| 2025-12-29 | POLIT JAVIER | S-Sale | 2,049.00 | $867.21 | $1.8M |
| 2025-12-30 | POLIT JAVIER | S-Sale | 558.31 | $862.90 | $481,759 |
| 2025-12-19 | DENMAN KENNETH D | G-Gift | 325.00 | $0.00 | $0 |
| 2025-12-15 | DECKER SUSAN L | G-Gift | 2,827.00 | $0.00 | $0 |
Dividend History (Last 20)
Last updated: Jun 21, 2026 7:47pm (5d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-05-01 | $1.47 | 2026-04-15 | 2026-05-01 | 2026-05-15 |
| 2026-01-30 | $1.30 | 2026-01-15 | 2026-01-30 | 2026-02-13 |
| 2025-10-31 | $1.30 | 2025-10-15 | 2025-10-31 | 2025-11-14 |
| 2025-08-01 | $1.30 | 2025-07-15 | 2025-08-01 | 2025-08-15 |
| 2025-05-02 | $1.30 | 2025-04-16 | 2025-05-02 | 2025-05-16 |
| 2025-02-07 | $1.16 | 2025-01-23 | 2025-02-07 | 2025-02-21 |
| 2024-11-01 | $1.16 | 2024-10-16 | 2024-11-01 | 2024-11-15 |
| 2024-07-26 | $1.16 | 2024-07-10 | 2024-07-26 | 2024-08-09 |
| 2024-04-25 | $1.16 | 2024-04-10 | 2024-04-26 | 2024-05-10 |
| 2024-02-01 | $1.02 | 2024-01-18 | 2024-02-02 | 2024-02-16 |
| 2023-12-27 | $15.00 | 2023-12-13 | 2023-12-28 | 2024-01-12 |
| 2023-11-02 | $1.02 | 2023-10-18 | 2023-11-03 | 2023-11-17 |
| 2023-08-24 | $1.02 | 2023-08-09 | 2023-08-25 | 2023-09-08 |
| 2023-05-04 | $1.02 | 2023-04-19 | 2023-05-05 | 2023-05-19 |
| 2023-02-02 | $0.90 | 2023-01-19 | 2023-02-03 | 2023-02-17 |
| 2022-10-27 | $0.90 | 2022-10-12 | 2022-10-28 | 2022-11-10 |
| 2022-07-28 | $0.90 | 2022-07-13 | 2022-07-29 | 2022-08-12 |
| 2022-04-28 | $0.90 | 2022-04-13 | 2022-04-29 | 2022-05-13 |
| 2022-02-03 | $0.79 | 2022-01-20 | 2022-02-04 | 2022-02-18 |
| 2021-10-28 | $0.79 | 2021-10-13 | 2021-10-29 | 2021-11-12 |
Narrative Economics
market-narrative step).
Delvantic AI Findings
Looking at the raw numbers first: Costco compounded revenue from $195.9B (FY21) to $275.2B (FY25), a 8.9% CAGR, with net income going $5.01B → $8.10B (12.7% CAGR). Operating margin crept from 3.43% to 3.77% — real but glacial. The quarterly cadence shows FY26 Q2 (Feb-period) at $69.6B vs $63.7B prior year (+9.2%) and Q3 at $70.5B vs $63.2B (+11.5%), with net margin nudging to 3.1%. So the deceleration narrative the "Revenue Confidence" signal flags is wrong on the most recent print — Q3 actually accelerated YoY in both revenue and margin. Earnings YoY ~17% on the latest comparison, not 9.9%. That matters because the synthesis verdict ("Priced for Perfection") leans on a decel that isn't visible in the freshest data.
That said, the valuation math is brutal regardless. At $957.68 and ~$8.5B TTM net income (rolling the four most recent quarters: 2.19+2.04+2.00+2.61 = $8.84B), the P/E is ~48x. FCF was $7.84B in FY25, giving a P/FCF of ~54x and an FCF yield of 1.85%. Even if you grant 10% earnings growth and modest multiple stability, the 5-year forward return looks like ~10% annualized if nothing re-rates — and a re-rating to even 35x P/E (still premium) implies a ~27% multiple haircut, eating 3+ years of earnings growth. The reverse-DCF point in the synthesis stands: you need either sustained low-double-digit earnings growth for a decade or another fee hike cycle to justify spot. The dividend yield of 0.5% offers no cushion; classifying this as "dividend-income" is wrong — it's a low-yield compounder with a special-dividend habit.
Where I diverge from the prior models: the "Market Narrative" engine calls this "anchored" and "moderate intensity." I'd argue it's closer to unanchored on the margin — a 48x P/E for a 3% net margin retailer growing high single digits is a story-driven premium, not a DCF-justified one. Buffett-halo, "Costco-nomics" TikTok content, and the defensive-growth bucket flows are doing real work. The contrarian case nobody's making: Costco's e-commerce remains underdeveloped vs Amazon/Walmart+ ($30B-ish digital, growing but small), and the membership fee hike already happened (Sept 2024, $65→$65 Gold Star, Executive $120→$130) — the next catalyst is 5-7 years out. Meanwhile, GLP-1 drugs are a non-trivial threat to a business where ~55% of sales are food and the treasure-hunt economics rely on impulse volume. Insider activity is quietly net-selling (small absolute amounts, but zero open-market buys), which is what you'd expect from insiders who think the stock is fully priced.
I agree with the synthesis verdict directionally but think it's slightly overstated. "Priced for perfection" implies fragility; Costco's earnings durability is genuinely exceptional and the multiple has been "too high" for 5+ years while the stock compounded ~20% annually. The honest read: fair value on a 30-35x normalized P/E and $9.5B FY26 earnings is roughly $640-$745 ($285B-$332B market cap), so the stock is 25-35% above defensible intrinsic value. But "expensive quality" can stay expensive for years, and shorting or avoiding has been a losing trade for a decade. For a holder, trim not exit; for a new buyer, this is a terrible entry point absent a 15%+ drawdown. The models converge on the right answer for slightly wrong reasons — the deceleration claim is stale, the dividend-income tag is miscategorized, but the perfection-pricing conclusion holds on multiple alone.
GPT Critique
Costco's financials reveal a company that's been on a steady growth trajectory, with a revenue CAGR of 8.9% over the past five years, reaching $275.2 billion in FY25. Net income has also seen a robust growth of 12.7% CAGR, climbing from $5.01 billion to $8.10 billion over the same period. Notably, the operating margin has shown modest improvement, edging up from 3.43% to 3.77%. Recent quarterly data suggests a continued upward trend, with Q3 FY26 revenue at $70.5 billion, up 11.5% year-over-year, and a net margin improving to 3.1%. These figures contradict the "Revenue Confidence" signal's suggestion of deceleration, underscoring a more resilient growth path than some might anticipate.
I find myself in agreement with Opus's assertion that Costco's valuation is steep. The current P/E ratio of approximately 48x, considering the latest rolling net income of $8.84 billion, indeed reflects a lofty premium. With an FCF yield of 1.85%, the stock demands a belief in continued strong growth or further membership fee hikes to justify its price. I also concur with Opus that the classification of Costco as a "dividend-income" stock is a mischaracterization; its low dividend yield does not support this category, despite its consistent, albeit special, dividend payouts.
However, I diverge from Opus's view concerning the narrative driving Costco's valuation. While Opus suggests a narrative-driven premium, I believe the premium is more anchored in strong fundamentals and the company's proven ability to sustain growth amidst challenging retail environments. The consistent high renewal rates, ability to periodically raise membership fees, and strategic international expansion play substantial roles in justifying the valuation, beyond mere storytelling. Furthermore, while Opus raises concerns about Costco's e-commerce lagging behind giants like Amazon, the company's physical store model and membership loyalty provide a different competitive edge that continues to resonate with consumers.
A careful skeptic might argue that the valuation remains excessively high given the modest net margin of around 3% and the retail sector's inherent vulnerabilities to economic downturns. They might question the sustainability of Costco's growth as market saturation becomes more pronounced in mature markets, and as digital competitors intensify pressure. Additionally, the insider net-selling could signal a lack of confidence in the stock's current valuation, meriting further scrutiny.