COSTCO WHOLESALE CORP /NEW (COST)

Price—Loading quote

AI: Overvalued

Price checkThe shares look expensive because today's price pays heavily for years of near-perfect growth.

Costco closed at $961.10 on August 14. The last four reported quarters produced roughly $19.89 per share of earnings, making the price about 48 times earnings. Free cash flow—cash left after running and investing in the business—was approximately $8.81 billion, or $19.86 per share, implying another 48-times multiple and a thin 2.1% cash yield. Even if earnings grow 10% annually for five years, today's price equals about 30 times that future year's earnings.

Big pictureSales, profits, and cash keep growing, while the balance sheet offers strong protection.

From fiscal 2020 through 2025, revenue rose 65% to $275.24 billion and net income roughly doubled to $8.10 billion. Fiscal 2025 free cash flow reached $7.84 billion, versus $6.63 billion in 2024 and $6.05 billion in 2020; the uneven progression matters at this valuation. The latest four quarters produced about $8.81 billion. At May 10, 2026, cash exceeded debt by $13.28 billion, while current assets of $45.18 billion modestly exceeded $42.13 billion of near-term liabilities.

Business strengthMembership loyalty supports steady profits, but buybacks have mostly prevented rather than reduced dilution.

Third-quarter membership fees increased 10.7% to $1.37 billion, helping fund Costco's low merchandise prices and reinforcing customer loyalty. July sales at established warehouses grew 6.6% after removing gasoline and currency effects, while digitally enabled sales grew 18.2% on that basis. Capital allocation is conservative but not transformative: fiscal 2025 buybacks of $903 million barely exceeded $860 million of employee share compensation. Outstanding shares increased about 0.5% from 2020 to May 2026, so repurchases have mainly contained dilution; dividends remain the larger direct return.

What could change the storyFaster member growth could justify the premium, while slower core sales could expose it.

The strongest bull case is continued warehouse expansion, high renewals, and digitally enabled growth sustaining double-digit profit and cash gains. The bear case is valuation: July comparable sales—sales at established warehouses—were 8.9%, but only 6.6% after excluding gasoline and currencies. Gasoline represented about 10% of fiscal 2025 sales, making headline growth somewhat cyclical. The thesis improves if earnings and free cash flow grow above 10% without dilution; repeated core sales growth below 5% or rising costs would make the current roughly 48-times valuation difficult to defend.

$961.10 price considered

AI: News

Quarterly expectations resetQuarterly profit grew strongly, yet a slight earnings miss exposed the stock's demanding expectations.

On May 28, Costco reported fiscal third-quarter revenue of $70.53 billion, up 11.6%, and earnings of $4.93 per share, up 15.2%. Membership fees rose 10.7%, and comparable sales excluding gasoline and currencies increased 6.6%. Shares fell about 3.9% on May 29 after earnings came slightly below one widely reported consensus estimate. Reporting tied the reaction to that miss and the premium valuation, although broader trading may also have contributed.

June growth disappointmentStrong June sales still disappointed investors after fuel and currency effects were removed.

On July 8, Costco reported June net sales of $29.24 billion, up 10.6%, and declared a $1.47 quarterly dividend. Comparable sales rose 8.8%, but growth slowed to 7.0% after removing gasoline and currency effects; Canada produced only 4.9% on that basis. Shares closed 4.21% lower at $912.97 on July 9. Contemporary reporting linked the drop to slower underlying growth and demanding expectations, though timing alone cannot prove that the sales release caused the entire move.

July sales stayed firmJuly sales stayed healthy, showing Costco kept gaining spending despite a weaker consumer backdrop.

On August 5, Costco reported July net sales of $23.12 billion, 10.7% above the prior year. Comparable sales increased 8.9%, or 6.6% after excluding gasoline and currency movements, while digitally enabled sales rose 18.2% on that adjusted basis. The shares gained 0.76% on August 6 after the after-hours release. That modest move is consistent with reassurance rather than a major expectations reset, but attributing it solely to the sales data would be uncertain.

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Free cash flow

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Financial statements

	2025	2024	2023	2022	2021	2020	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009	2008
Revenue	$275.24B	$254.45B	$242.29B	$226.95B	$195.93B	$166.76B	$141.58B	$129.03B	$118.72B	$116.20B	$112.64B	$105.16B	$99.14B	$88.92B	$77.95B	$71.42B	$72.48B
Operating income	$10.38B	$9.29B	$8.11B	$7.79B	$6.71B	$5.43B	$4.48B	$4.11B	$3.67B	$3.62B	$3.22B	$3.05B	$2.76B	$2.44B	$2.08B	$1.78B	$1.97B
EBITDAderived	$12.81B	$11.52B	$10.19B	$9.69B	$8.49B	$7.08B	$5.92B	$5.48B	$4.93B	$4.75B	$4.25B	$4.00B	$3.67B	$3.29B	$2.87B	$2.50B	$2.62B
Net income	$8.10B	$7.37B	$6.29B	$5.84B	$5.01B	$4.00B	$3.13B	$2.68B	$2.35B	$2.38B	$2.06B	$2.04B	$1.71B	$1.46B	$1.30B	$1.09B	$1.28B
Basic EPSper diluted share	$18.24	$16.59	$14.18	$13.17	$11.30	$9.05	$7.15	$6.11	$5.36	$5.41	$4.69	$4.68	$3.94	$3.35	$2.97	$2.50	—
Diluted EPSper diluted share	$18.21	$16.56	$14.16	$13.14	$11.27	$9.02	$7.09	$6.08	$5.33	$5.37	$4.65	$4.63	$3.89	$3.30	$2.92	$2.47	—

Review source filings at SEC.gov ↗

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)39$57.51M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 23, 2026Form 4	DENMAN KENNETH DDirector	SellCommon Stock	885	$957.45	$847.3K	4.8K
Apr 1, 2026Form 4	Frates CatonExecutive Vice President	SellCommon Stock	700	$993.00	$695.1K	5.8K
Mar 9, 2026Form 4	Adamo ClaudineExecutive Vice President	SellCommon Stock	730	$1.0K	$732.2K	6.1K
Jan 21, 2026Form 4	Jones Teresa A.Executive Vice President	SellCommon Stock	850	$986.26	$838.3K	4.2K
Jan 16, 2026Form 4	DECKER SUSAN LDirector	SellCommon Stock	458	$955.00	$437.4K	8.5K

Review ownership filings at SEC.gov ↗

COSTCO WHOLESALE CORP /NEW (COST)

Financial charts

Financial statements

Insider buys & sells