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What this page is: Delvantic's full research page for Costco Wholesale Corporation (COST) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-08-23): Designation Watch · Gem Score -3 (−100…+100 Quality+Value blend) · Quality 88 · Value -78 · Sentiment 45 (timing only, not weighted) · Composite fair value $312.80 vs $954.17 at analysis
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profile-header/price-overview— company profile, live quote, market capextended-analysis— the core: three AI lens reads with findings, scores, and the analyst memofuture-predictions— our forward price-band predictionsmarket-narrative/ai-findings/gpt-critique— narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)- Members-only sections (render as login gates for anonymous readers):
price-history,income-trend,key-metrics,financials(statement tables),insider-trading. The analysis above is public; the raw data tables require a free account.
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Costco Wholesale Corporation
COST NASDAQCostco Wholesale Corporation operates a global chain of membership-based warehouse clubs, offering high-quality goods and services at low prices. Customers access a vast selection of products through annual membership fees, including groceries, general merchandise, electronics, appliances, and apparel. The company provides additional services such as gasoline, pharmacy, optical, food courts, and travel offerings. Its business spans three main segments: United States, Canada, and International, with warehouses serving millions of members worldwide. Grocery items constitute a significant portion of sales, complemented by non-food merchandise and ancillary services that enhance the shopping experience. Founded in 1983 and headquartered in Issaquah, Washington, Costco Wholesale Corporation emphasizes bulk purchasing, efficient operations, and member loyalty in the discount retail sector. This model supports its role as a key player in the consumer defensive industry, catering to both individual households and small businesses seeking value-driven procurement.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 18.21
Total Equity: $29.16B
Shares: 444,803,000
Total Debt: $5.79B
Cash: $14.16B
EBITDA: $12.81B
Total Debt: $5.79B
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: $5.79B
Cash: $14.16B
Current Liabilities: $37.11B
Long-Term Debt: $5.71B
Total Debt: $5.79B
Total Equity: $29.16B
Shares: 444,803,000
Shares: 444,803,000
CapEx: -$5.50B
Shares: 444,803,000
Stock Price: $954.27
Net Income: $8.10B
Industry Benchmarks
Income Statement (Annual)
Last updated: Jul 31, 2026 12:33am (23d 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 | $8.5B | $9.7B | $10.2B | $11.5B | $12.8B |
| EPS | $11.30 | $13.17 | $14.18 | $16.59 | $18.24 |
| EPS (Diluted) | $11.27 | $13.14 | $14.16 | $16.56 | $18.21 |
Balance Sheet (Annual)
Last updated: Jul 31, 2026 12:01am (23d 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 | $18.1B | $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: Jul 31, 2026 12:33am (23d 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) | — | — | — | — | — |
| Net Debt Issued / (Repaid) | -$53.0M | -$747.0M | $842.0M | $349.0M | $713.0M |
| Dividends Paid | -$5.7B | — | — | — | — |
| 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 |
Growth Trends (YoY %)
Last updated: Jul 31, 2026 12:33am (23d 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 | +14.2% | +5.1% | +13.1% | +11.2% |
Dividend History (Last 20)
Last updated: Jul 31, 2026 12:02am (23d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-07-24 | $1.47 | — | — | — |
| 2026-05-01 | $1.47 | — | — | — |
| 2026-01-30 | $1.30 | — | — | — |
| 2025-10-31 | $1.30 | — | — | — |
| 2025-08-01 | $1.30 | — | — | — |
| 2025-05-02 | $1.30 | — | — | — |
| 2025-02-07 | $1.16 | — | — | — |
| 2024-11-01 | $1.16 | — | — | — |
| 2024-07-26 | $1.16 | — | — | — |
| 2024-04-25 | $1.16 | — | — | — |
| 2024-02-01 | $1.02 | — | — | — |
| 2023-12-27 | $15.00 | — | — | — |
| 2023-11-02 | $1.02 | — | — | — |
| 2023-08-24 | $1.02 | — | — | — |
| 2023-05-04 | $1.02 | — | — | — |
| 2023-02-02 | $0.90 | — | — | — |
| 2022-10-27 | $0.90 | — | — | — |
| 2022-07-28 | $0.90 | — | — | — |
| 2022-04-28 | $0.90 | — | — | — |
| 2022-02-03 | $0.79 | — | — | — |
Deep Analysis
Risk : Reward — if the last quarter repeats
Live · as of 2026-08-19 08:45Even the bull case prices 12% below today — the ratio here measures the model-vs-market gap, not payoff odds. Another quarter like the worst recent one costs 73%.
| Case | Growth | Margin | Fair value | vs price ($954.17) |
|---|---|---|---|---|
| Bull — recovery | +13% | 9.2% | $835.89 | -12% |
| Base — stabilizes | +8% | 8.0% | $637.76 | -33% |
| Bear — keeps slipping | +4% | 6.8% | $475.21 | -50% |
| Stress — last quarter repeats | +8% | 3.1% | $257.63 | -73% |
Narrative Economics
market-narrative step).
Claude Reading
Looking at the raw numbers first: Costco is doing $275B in TTM revenue growing ~8% YoY, net margin stuck at 2.9-3.1% (structurally — this is the model, not a bug), and generating $7.84B FCF against a $432B market cap. That's a 1.8% FCF yield on a business growing earnings ~10-13%. The quarterly cadence is clean and boringly consistent: Q1 (holiday) rev of $67.3B → $69.6B → $70.5B in the most recent three, with NI marching $2.00B → $2.04B → $2.19B. No deceleration in absolute earnings; the "decelerating" quarterly trend flag looks like a fiscal-calendar artifact (Q4 always spikes to $86B). ROIC of 37% and ROE of 28% on 0.2x debt/equity is genuinely elite — this isn't leverage-manufactured returns.
Now the model stack. The synthesis verdict of $299-332 fair value against $954 is directionally correct but almost certainly too aggressive on the downside. A DCF that spits out a 65% haircut on a business compounding earnings at 13.5% with 37% ROIC is telling you more about the discount rate and terminal assumptions than about Costco. The "50.8% FCF CAGR required" framing in Thesis Evaluation is also suspect — at 10% earnings growth and modest multiple compression to, say, 35x (still premium), you'd get a fair value nearer $650-700, not $332. So I partially agree with the overvaluation call but think the models are anchoring to a fair value that no quality-compounder has traded at in a decade. The Narrative Economics layer is the most honest read here: this is a durable-narrative stock where the story IS a component of the price, and it has been for 20 years. Fighting that with a two-stage DCF is a known losing trade.
The contrarian case for the bulls: membership fees (~$5B+ annually and ~100% margin) are the actual earnings engine, and renewal rates sit at 92-93% globally. If you strip out merchandise and value Costco as a membership business with retail attached, the multiple looks less absurd. International white space (particularly China, where Costco has a handful of wildly successful clubs) plus the recent membership fee hike (first in 7 years) provides multi-year earnings visibility that a DCF using 6.6% revenue CAGR undercounts. Insider selling is de minimis — 700-900 share sales are executive comp housekeeping, not a signal. The bear counter: at 52x earnings and 32x EV/EBITDA on a 3% net margin retailer, any single quarter of comp deceleration, any Amazon/Walmart+ share loss, or any wage cycle Costco can't pass through breaks the multiple hard. There is no valuation cushion. Berkshire actually sold its entire Costco position years ago — the "storytellers" list is stale on that point.
I dissent with the magnitude of the synthesis verdict but agree with the direction. Fair value at this stage of the cycle is not $332 and it's not $954 — it's somewhere in the $600-700 range, implying 25-35% downside rather than 65%. The stock is priced for perfection and I wouldn't be a buyer here, but the models are systematically underweighting narrative durability and the membership-fee annuity. What would change my mind: a membership renewal rate print below 90%, a comp sales miss (Costco reports monthly, so this is testable), or evidence Kirkland pricing power is eroding in the categories where private label meets branded parity. Absent those, this is a "trim, don't short" setup — the kind of stock where the fundamentals slowly grow into a still-rich multiple and you feel dumb waiting for the pullback that comes only during broad market dislocations. Data gaps worth flagging: the insider records are anonymized ("?" for name/title), the FY26 fiscal calendar is inferred, and there's no membership fee disclosure or comp-store sales breakout in what was provided — all three matter more than the aggregate P&L for judging this specific business.
GPT Reading
Costco is an exceptional business priced like an exceptional business plus a miracle. The operating record is hard to argue with: revenue has risen from $195.9B in 2021 to $275.2B in 2025, a 9%ish annualized climb through a business that already starts enormous; net income grew from $5.0B to $8.1B over the same span, and operating income from $6.7B to $10.4B. The latest run-rate still looks healthy, with the first three reported quarters of fiscal 2026 at $207.4B of revenue and $6.23B of net income versus $189.2B and $5.49B in the comparable prior-year periods, about 9.6% revenue growth and 13.5% earnings growth. That is exactly what high-quality retail execution looks like. But the other half of the story is that Costco still earns only 3.8% operating margins and 2.9% net margins on an annual basis. This is a magnificent low-margin machine, not a software platform. Paying 52.4x earnings, 32.4x EV/EBITDA, 14.6x book, and 1.54x sales for a business with 6.6% revenue CAGR and 7.8% FCF CAGR is paying an ultra-premium multiple for durability, not for explosive economics.
The balance sheet and cash generation do justify a premium, just not this one. Costco has $14.2B of cash against only $5.8B of debt, generated $13.3B of operating cash flow in 2025, and still produced $7.8B of free cash flow after $5.5B of capex. ROIC of 37.4% is elite and reflects the power of its negative working-capital-style retail model plus membership economics. But that same quality is already more than capitalized in a $432B market cap. On 2025 numbers, the stock trades at roughly 53x net income and about 55x free cash flow. To earn even a market-like return from here, Costco likely needs to sustain double-digit EPS growth for years while avoiding any multiple compression from these heights. That is a very hard setup when annual revenue growth is running high-single digits and margins are already tightly optimized. Even if fiscal 2026 net income reaches roughly $8.9B-$9.1B on current quarterly cadence, the forward P/E still sits around the high 40s. For a grocer-adjacent discount retailer, that is extreme.
What stands out most is that the business is not showing the kind of acceleration that would rationalize a further rerating. Quarterly revenue went from $62.15B in Nov-2024 to $67.31B in Nov-2025, then $63.72B to $69.60B, then $63.21B to $70.53B in the latest May quarter; these are strong gains, but they are steady-compounder gains, not a step-function change in the model. Net margins remain stuck around 2.8%-3.1% every quarter. In other words, Costco is executing almost perfectly, but the numbers still describe a business compounding from volume, turns, and membership leverage rather than from widening profitability. When the valuation already assumes near-permanent scarcity value, “still excellent” can become a de-rating catalyst. The rule-based “mature earner” label is closer to the truth than the market multiple suggests.
The best case against my view is straightforward: Costco has earned the right to look expensive because nearly every conventional valuation has been “wrong” on it for years. Earnings CAGR of 13.5% has materially outpaced revenue growth, showing operating leverage despite the low-margin model. ROE of 27.8% and ROIC above 37% are not normal for retail. The cash balance exceeds debt by more than $8B, reducing risk in a way most peers cannot match. If membership fee growth, warehouse expansion, and mix shift keep earnings compounding low teens, then a forward multiple in the 40s could compress only gradually while shareholders still do fine. A smart bull would also say that comparing Costco to other retailers on P/E misses that much of the value lies in trust, traffic consistency, and the ability to take share in almost any consumer environment. I agree with all of that; I just think those are arguments for a premium multiple, not for one that treats Costco as if cyclical and competitive pressures no longer apply.
What would change my mind is not another quarter of 8%-10% revenue growth with 3% net margins; that just confirms the current business quality. I would need evidence that the earnings algorithm is structurally better than I think: either sustained low-teens revenue growth at this scale, or a clear move in annual operating margin from 3.8% toward 4.5%+, or free cash flow stepping up from $7.8B to well above $10B without an equivalent surge in capex. Short of that, the more likely path is that Costco remains a great company while the stock digests an unjustifiably rich multiple. At around $954, the business looks priced for perfection; I would need a materially lower entry point, roughly the $650-$750 range, before the quality and valuation begin to balance.
Grok Reading
Costco’s operating engine remains as reliable as the models imply and the narrative celebrates. Annual revenue climbed from $195.9B in FY2021 to $275.2B in FY2025, a 6.6% CAGR, while net income compounded faster at 13.5% to $8.10B as operating leverage and membership-fee mix did their quiet work. The latest four quarters show no fracture: revenue ran $67.3B → $69.6B → $70.5B (ex-seasonal Q4), with year-over-year gains of 8–12% and net margins locked at 2.9–3.1%. Free cash flow of $7.84B on $13.34B operating cash flow, against only $5.79B of total debt and $14.16B cash, confirms a balance sheet that can fund warehouse growth, special dividends, and buybacks without stress. ROIC at 37% and ROE at 28% are elite for any retailer. The story the numbers tell is uninterrupted high-quality compounding at mid-to-high single-digit top-line growth and low-double-digit earnings growth—nothing more exotic.
That same data set, however, cannot justify a 52.4× P/E, 32.4× EV/EBITDA, or 14.6× P/B. At $954 the market is paying roughly $432B for a business that generated $8.1B of net income and $7.8B of FCF last year. Even granting the membership moat its full due, the implied expectation is sustained mid-teens earnings growth and zero margin compression for the better part of a decade—an outcome that would require Costco to keep taking share, raising fees, and expanding internationally while holding net margins near 3% in a wage- and freight-sensitive model. Recent revenue growth has been solid, not explosive; the 8.2% trailing figure and decelerating quarterly trend flag that the easy post-pandemic comparisons are fading. Insider activity is a steady drip of small sales and gifts, not accumulation. The quantitative fair-value cluster around $300–$330 is too punitive because it strips out any quality premium, yet even a generous 35–40× multiple on forward earnings still lands closer to $650–$750. From $954 the asymmetry is clearly to the downside.
The strongest counter-argument is that Costco has earned its premium for two decades precisely because the membership model converts low gross margins (12.8%) into high incremental returns on capital, renewal rates stay above 90%, and the Kirkland private-label flywheel keeps expanding. Bulls will correctly note that earnings have outgrown revenue for five straight years, that the fortress balance sheet removes solvency risk, and that every prior “too expensive” call has been run over by compounding. They will also point out that 52× looks less absurd if you capitalize the membership-fee stream as a high-margin annuity and treat warehouse real estate as under-appreciated. Those points are real; they explain why the stock has rarely traded at a market multiple. They do not, however, bridge a 187% gap to DCF or make 50×+ earnings a rational entry when FCF is still growing only ~8%. Quality is already fully, and then some, in the price.
I would reverse to neutral or constructive only if the next two reported quarters show revenue re-accelerating above 12% with membership growth re-accelerating, or if a fee increase lands that lifts operating margin sustainably above 4.5% while FCF conversion stays above 50%. A multiple compression to the mid-30s on unchanged fundamentals would also reset the risk-reward.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
Revenue has compounded from $195.9B (2021) to $275.2B (2025), roughly 8.9% CAGR, while operating margin has widened from 3.4% to 3.8% and gross margin from 12.1% (2022 trough) to 12.8%. Net income rose from $5.01B to $8.10B (~13% CAGR), meaningfully outpacing revenue - real, if modest, operating leverage on a razor-thin margin structure that is characteristic of the membership warehouse model. FCF reached $7.84B in 2025 with OCF/NI at 1.6x and accruals at -5.7% of assets, a strong signal that reported earnings are backed by cash. Balance sheet is a fortress: $15.28B liquid cash, $9.50B net cash, Altman Z of 9.85, Beneish M of -2.66. Diluted share count is essentially flat at ~444.8M across five years, with SBC only 0.3% of revenue and buybacks covering 83.7% of SBC - per-share value is protected. Insider activity is routine small-lot selling by directors/officers (largest sale ~$1.8M), consistent with compensation-driven liquidity rather than a directional signal. Nothing in the tape or the mechanical checks flags concern; the business is executing at a level very few public companies approach.
Verify before trusting this (5)
- Membership renewal rates and fee cadence disclosed in the 10-K - the true moat metric
- Warehouse unit growth and international expansion pace vs. comp sales
- Any customer/supplier concentration or Kirkland private-label supplier risks in filings
- Capex intensity trend and whether FCF strength is sustainable through the current store build cycle
- Details on the ~$19M insider sales - whether under 10b5-1 plans
The e2e composite fair value of $299 and signal-adjusted $332 imply a 65% overvaluation, but those figures look mechanically low for a business of this quality - a DCF at $282 and EPV floor at $200 almost certainly under-weight Costco's demonstrated ability to reinvest at high returns and grow membership economics. The anchored-PE of $433 is the most credible of the three and still sits 55% below spot. Even if I generously stretch deserved value to reflect Fortress quality, pristine earnings, and durable pricing power, I struggle to justify more than roughly $600-750 per share on any disciplined framework.
Verify before trusting this (4)
- Membership renewal rates and fee-hike cadence in latest 10-Q
- Comp sales ex-fuel and ex-FX trend
- Operating margin trajectory vs wage inflation
- Any change in reinvestment runway (warehouse openings guidance)
The story on COST is doing the heavy lifting: a strong, durable 'quiet-quality secular compounder' narrative with medium cult coefficient — the market has crowned this name a sacred-cow, and that framing is sticky. News flow reinforces the myth (gas-station 'subscription play hiding in plain sight', decade-of-returns retrospectives, dividend-math pieces), which is exactly the drumbeat that keeps a quality-cult name bid. Analyst/press tone is more admiring than skeptical, with only mild valuation grumbling ('stretched', 'expensive on standard checks') that never escalates into a de-rating catalyst. That is a net tailwind on sentiment even as one article flags the 187% premium to DCF. With beta 0.87 and defensive consumer-staples positioning, a neutral tape at VIX 17 and S&P -2.3% off highs lands softly here — money hiding from macro noise tends to rotate INTO names like COST, not out. The Fed on hold and rates at 4.67% is a mild background headwind for any 26x-market multiple, but Costco's narrative has repeatedly shrugged off rate concerns. The main non-fundamental risk is a valuation-driven crack — 'stretched' commentary is rising in frequency, which can seed a narrative shift if a growth wobble or member-fee friction hits. For now the story is intact, the tape is not hostile, and there is no active de-rating catalyst on the wire.
Verify before trusting this (4)
- Monthly comparable sales / member renewal rates for any first crack in the compounder story
- Whether valuation-skeptic pieces escalate from isolated to consensus tone
- Sector rotation flows — if defensives get sold in a risk-on turn, COST loses its shelter bid
- Any commentary on membership-fee elasticity or ecommerce cannibalization that could reframe the narrative
This lens hasn't been run for this ticker yet.
When we made this prediction on Jul 31, 2026, COST was $954.17. We expect it to be $895.00 by Jan 2027, and we consider it great value under $700.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Jul 31, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.