COST
Costco Wholesale Corporation
Consumer Staples / Consumer Staples Distribution & Retail / Issaquah, WA
AnalystScope signal
Buy
Scheduled quote
$936
Base fair value
$1,040
Bear / base / bull
$920 / $1,040 / $1,120
Upside / downside
+11.2 upside
Confidence
Medium
Research updated Apr 9, 2026
Daily scheduled refresh as of Jul 21, 2026, 6:05 AM UTC. Fresh through Jul 22, 2026, 6:05 AM UTC.
Informational research only. Not personalized investment advice.
Model vs published view
Current model signal differs from the latest published analyst rating.
Investment summary
Current view and thesis
Costco remains an elite defensive compounder, but the current multiple already embeds much of that quality, leaving the setup closer to Hold than to a wide-gap upside case.
Fair value $1,040 vs. current $936 (+11.2 upside). Current base fair value is $1,040 versus $936, implying +11.2 upside.
Key drivers
Membership fee economics and traffic resilience remain the core valuation anchors.
Scale advantages help preserve margin quality even in a promotional retail environment.
A strong balance sheet and disciplined capital allocation reinforce downside support.
Key risks
The current valuation leaves little room for operational disappointment or slower fee/member growth.
Category mix pressure can make already-thin margins look weaker than the through-cycle base.
If traffic or renewal behavior softens, the quality premium could compress quickly.
What would change the view
A materially wider discount to fair value would make the quality case more attractive.
Stronger evidence of sustained membership monetization could improve the valuation support.
If traffic resilience weakens while the multiple stays elevated, the setup would deteriorate.
Valuation
Price, range, and method support
Base case $1,040 / +11.2 upside / medium confidence
Price vs fair value
+11.1%
Model-implied return
Scheduled quote
$936
Fair value
$1040
Valuation method stack
Weighted fair value $1040
Published method weights
DCF (Base)
$1,058 | 45%
NTM P/E Multiple
$1,034 | 35%
EV/EBITDA Cross-check
$1,012 | 20%
| Case / method | Value | Weight / support |
|---|---|---|
| DCF (Base) | $1,058 | 45% |
| NTM P/E Multiple | $1,034 | 35% |
| EV/EBITDA Cross-check | $1,012 | 20% |
| Bear case | $920 | Mixed |
| Base case | $1,040 | Mixed |
| Bull case | $1,120 | Mixed |
Fundamental analysis
Reported evidence and normalized model base
Normalized annual basis: FY2025
Normalized figures are AnalystScope's annual valuation model base.
| Normalized metric | Latest value | Growth / margin context |
|---|---|---|
| Revenue | $286.3B | +12.5% YoY |
| Operating income | $10.9B | 3.8% margin |
| Net income | $8.3B | EPS proxy $18.70 |
| Free cash flow | $9.7B | 3.4% margin |
| EBITDA | $14.0B | 4.9% margin |
| Net cash / (debt) | $9.0B | +3.1% of revenue |
| Metric | Reported | AnalystScope normalized | Basis note |
|---|---|---|---|
| Revenue (TTM) | $275.2B | $286.3B | Model revenue smooths member traffic and category mix swings instead of extrapolating a single period of unusually strong retail demand. |
| Operating Margin | 3.8% | 3.8% | Margin input keeps the base on durable membership-led retail economics rather than temporary mix or shrink improvements. |
| FCF (TTM) | $7.8B | $9.7B | FCF input adjusts for inventory and vendor timing so the cash-conversion base stays conservative. |
| Net Cash / (Debt) | $13.3B | $9.0B | Balance-sheet treatment reflects membership-model resilience without assuming excess cash is fully distributable. |
Fundamental snapshot
FY2025
Normalized annual model base
Revenue
+12.5% YoY
$286.3B
Op. margin
+0.3% pts
3.8%
FCF margin
-0.0% pts
3.4%
Revenue + margin trend
Annual normalized model-base history.
Revenue
Operating margin
AnalystScope annual model-base statements in USD across FY2023 | FY2024 | FY2025.
Income statement
| Line item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Revenue | $242.3B | $254.5B | $286.3B |
| Gross Profit | $31.5B | $32.6B | $36.9B |
| Operating Income | $8.0B | $8.9B | $10.9B |
| EBITDA | $10.7B | $11.7B | $14.0B |
| Net Income | $6.3B | $6.9B | $8.3B |
Balance sheet
| Line item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Cash & Investments | $14.0B | $15.0B | $16.0B |
| Total Debt | $7.5B | $7.3B | $7.0B |
| Net Cash / (Debt) | $6.5B | $7.7B | $9.0B |
| Total Assets | $70.0B | $73.0B | $77.0B |
| Total Liabilities | $51.0B | $52.0B | $54.0B |
| Shareholders' Equity | $19.0B | $21.0B | $23.0B |
Cash flow
| Line item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Operating Cash Flow | $10.9B | $12.0B | $13.7B |
| Depreciation & Amortization | $2.7B | $2.8B | $3.1B |
| Capital Expenditures | ($2.9B) | ($3.3B) | ($4.0B) |
| Free Cash Flow | $8.0B | $8.7B | $9.7B |
Model assumptions
Base-case inputs and sensitivity
Published AnalystScope assumptions; private edits do not change this base case.
Revenue CAGR (5Y)
7.0%
+/- 1.0% => +/-$14/sh
Why this level: This is AnalystScope's base-case growth assumption, not a guarantee. It sits below the latest FY model-base revenue pace (2025.0%), so the model does not extend current strength too far into the outer years. Current company context: Membership fee economics and traffic resilience remain the core valuation anchors.
Terminal Growth
2.5%
+/- 0.5% => +/-$9/sh
Why this level: This is AnalystScope's mature long-run growth assumption, not a perpetual hypergrowth claim. At 2.5%, it sits well below the 7.0% five-year revenue CAGR, so the model steps down from the explicit forecast period to a steadier long-run pace. For Costco Wholesale Corporation, that means a durable franchise can keep compounding after year five without assuming today's faster growth profile lasts indefinitely.
WACC
7.9%
+/- 0.5% => -$16/sh
Why this level: This is AnalystScope's base-case cost-of-capital judgment, not a precise CAPM output. It reflects the current rates backdrop, equity risk premium, and the company's balance-sheet posture. Membership model supports balance-sheet flexibility
Operating Margin (Year 5)
4.2%
+/- 100 bps => +/-$13/sh
Why this level: This is AnalystScope's base-case margin view, not a promise of straight-line expansion. It keeps year-five margins close to today's model-base operating margin (3.8%), which implies the current margin structure is broadly durable. Margin input keeps the base on durable membership-led retail economics rather than temporary mix or shrink improvements.
Sensitivity drivers
Revenue CAGR (5Y)
7.0%
+/- 1.0% => +/-$14/sh
Terminal Growth
2.5%
+/- 0.5% => +/-$9/sh
WACC
7.9%
+/- 0.5% => -$16/sh
Operating Margin (Year 5)
4.2%
+/- 100 bps => +/-$13/sh
Confidence
Medium
Method outputs are tightly grouped at +4.4% dispersion.
Why the model view could be wrong
The current valuation leaves little room for operational disappointment or slower fee/member growth.
Category mix pressure can make already-thin margins look weaker than the through-cycle base.
If traffic or renewal behavior softens, the quality premium could compress quickly.
Private analysis
Test your own assumptions in Scenario Builder
Private scenarios remain separate from AnalystScope's published base case.
Private workspace
Scenario Builder
Private scenario sandbox
This is a private modelling layer, not the public AnalystScope base case or printable snapshot. It keeps the public base case as the anchor, applies bounded changes to the four core valuation inputs, and updates your scenario fair-value estimate immediately.
Saved scenarios currently stay local to this browser for COST. Base-case rationale remains in the public assumptions section above. Your scenario output reprices the published valuation methods from projected operating anchors when those anchors are available, while keeping market-multiple and capital-structure assumptions anchored to the AnalystScope framework.
Editable assumptions
Adjust your scenario inputs within the displayed plausible range for this company. The workbench stays anchored to the public AnalystScope base case.
This is a bounded scenario tool, not a free-form spreadsheet. Values outside the displayed range snap back to the nearest allowed value when you leave the field.
Matches the published AnalystScope base case.
Revenue CAGR (5Y)
Public AnalystScope base case: 7.0% | +/- 1.0% => +/-$14/sh
Allowed range: 1.0% to 13.0%
Terminal Growth
Public AnalystScope base case: 2.5% | +/- 0.5% => +/-$9/sh
Allowed range: 1.0% to 4.0%
WACC
Public AnalystScope base case: 7.9% | +/- 0.5% => -$16/sh
Allowed range: 6.0% to 9.9%
Operating Margin (Year 5)
Public AnalystScope base case: 4.2% | +/- 100 bps => +/-$13/sh
Allowed range: 0.0% to 12.2%
Saved private scenarios
Save up to 5 named scenarios for COST. These are your scenarios: they never overwrite the public AnalystScope base case and remain clearly separate from public research.
Checking private workspace session...
Private scenario note
Keep a short thesis, main risk, or why this case differs from the published base case.
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Notes stay local to this browser unless you sign in to the private workspace, and they never appear as published AnalystScope research.
No private scenarios saved yet. Make a change to the published base case, then save a named scenario here.
Published base case
Fair value
$1,040
Upside / Downside
+11.2 upside
Model signal
Buy
Published base-case output
Scenario output reprices the published DCF and multiple methods from projected year-5 revenue, margin, free cash flow, EBITDA, and EPS anchors. Market multiples and capital structure stay anchored to the published base framework.
Fair value
$1,040
$0/sh vs published base case
Upside / Downside
+11.2 upside
+0.0 pts vs published base case
Model signal
Buy
Unchanged versus the published base case.
Method movement inside the scenario
This breakdown shows what moved inside the published valuation framework when you edit the scenario. The published AnalystScope base case stays anchored, and any method without a clean projected anchor remains pinned to that framework.
Method rows below reflect the current edited scenario state, not just the saved scenario snapshots.
Influence tags are directional rather than exact attribution. They estimate which edited input is moving each method most by reverting one assumption at a time while the other edited inputs stay in place.
| Method | Published base | Edited scenario | Delta | How it moved / main drivers |
|---|---|---|---|---|
DCF (Base) DCF-style | 45% weight | $1,058 | $1,058 | $0/sh | Base-aligned This method is supported by the model-native bridge and currently stays aligned with the published base case. Edited inputs are largely offsetting each other, so this row stays close to the published base case. |
NTM P/E Multiple P/E-style | 35% weight | $1,034 | $1,034 | $0/sh | Base-aligned This method is supported by the model-native bridge and currently stays aligned with the published base case. Edited inputs are largely offsetting each other, so this row stays close to the published base case. |
EV/EBITDA Cross-check EV-based multiple | 20% weight | $1,012 | $1,012 | $0/sh | Base-aligned This method is supported by the model-native bridge and currently stays aligned with the published base case. Edited inputs are largely offsetting each other, so this row stays close to the published base case. |
Weighted fair value Published framework result | Published framework result | $1,040 | $1,040 | +$0/sh | Moved Combines the repriced method outputs using the published AnalystScope weights. No single edited assumption is dominating this move in a material way. |
Published base case vs private scenarios
Compare the published AnalystScope base case against your saved private scenarios in one view. Saved scenarios remain local to this browser, and the table below reflects saved snapshots rather than any unsaved edits currently sitting in the editor.
Fair-value comparisons use the same workbench recalculation path as the editor above.
Published base case stays pinned as the anchor row.
| Scenario | Revenue CAGR (5Y) | Terminal Growth | WACC | Op. Margin (Y5) | Fair Value | Upside / Downside | Model Signal | Delta vs Base | Action |
|---|---|---|---|---|---|---|---|---|---|
AnalystScope base case PublishedOfficial AnalystScope anchor row. | 7.0% | 2.5% | 7.9% | 4.2% | $1,040 | +11.2 upside | Buy | Published anchor |
Supporting research
Quality, normalization, and monitoring evidence
Annual model base: FY2023 | FY2024 | FY2025
Thesis scorecard
Growth
StrongMembership growth and traffic resilience continue to support a healthy long-run base.
Profitability
ModerateMargins are thin, but highly durable when viewed through the membership model.
Balance sheet
StrongNet cash and low operating risk support flexibility.
Valuation
WeakThe current multiple already capitalizes a large share of Costco's quality premium.
Execution / Resilience
StrongTraffic consistency and member loyalty support resilience.
Current source status
Quote: Daily scheduled refresh as of Jul 21, 2026, 6:05 AM UTC. Fresh through Jul 22, 2026, 6:05 AM UTC.
Reported fundamentals: Fundamentals refreshed 21 Jul 2026, 00:39 UTC. Fresh through 21 Jul 2026, 12:39 UTC.
Latest filing: 4 filed Jul 14, 2026 | Reporting period Jul 10, 2026. Filing refreshed Jul 21, 2026, 12:39 AM UTC. Fresh through Jul 21, 2026, 12:39 PM UTC.
Annual model-base income-statement, cash-flow, and balance-sheet metrics, plus cross-statement quality relationships with compact prior-FY direction cues, derived from the curated statement backbone.
Basis: FY2023 | FY2024 | FY2025. Live reported fundamentals remain available in the reconciliation section.
Operating and cash-flow trends
Revenue growth (1Y)
+12.5%
Gross margin
12.9%
Operating margin
3.8%
Operating margin change vs prior FY
+0.3 pts
EBITDA margin
4.9%
EBITDA margin change vs prior FY
+0.3 pts
Operating income growth (1Y)
+22.5%
Net margin
2.9%
FCF margin
3.4%
FCF margin change vs prior FY
-0.0 pts
FCF growth (1Y)
+11.5%
Balance sheet quality
Cash & investments
$16.0B
Total debt
$7.0B
Net cash / (debt)
Net cash $9.0B
Net cash / (debt) as % of revenue
Net cash 3.1% of revenue
Liabilities / assets
vs FY2024 (-1.1 pts)
70.1%
Cross-statement quality
Gross-to-operating spread
9.1 pts
Operating cash flow / net income
vs FY2024 (-0.1x)
1.7x
Operating cash flow / EBITDA
vs FY2024 (-0.0x)
1.0x
Free cash flow / net income
vs FY2024 (-0.1x)
1.2x
CapEx as % of revenue
vs FY2024 (+0.1 pts)
1.4%
CapEx as % of operating cash flow
vs FY2024 (+1.7 pts)
29.2%
CapEx / D&A
vs FY2024 (+0.1x)
1.3x
Cash & investments / total debt
vs FY2024 (+0.2x)
2.3x
Shareholders' equity as % of revenue
8.0%
Asset turnover
vs FY2024 (+0.2x)
3.7x
Compact model-base diagnostics for analyst triage, highlighting where the durable valuation base is diverging most clearly from the latest reported picture.
Adjustment focus
Large analyst adjustmentCash flow | FCF (TTM) | +$1.9B / +24%
Revenue momentum
Improving+12.5% latest 1Y growth
vs +5.0% prior 1Y
Operating margin trend
Stable3.8% latest margin
+31 bps vs prior FY
FCF margin trend
Stable3.4% latest FCF margin
-3 bps vs prior FY
Balance-sheet posture
StableNet cash 3.1% of revenue
vs Net cash 3.0% of revenue prior FY
How to read this
Reported = the latest company-reported figure. Model base = AnalystScope's comparable operating base used for valuation and thesis work. It may include standardization, conservative balance-sheet treatment, working-capital cleanup, and through-cycle adjustments when current reported numbers do not look durable.
This is an analyst model base, not a claim of perfect adjusted truth. Larger gaps can reflect deliberate cyclical or base-case adjustments, not just light accounting cleanup.
Why the model base differs
For Costco, the model base is intended to reflect durable membership and scale economics rather than quarter-specific retail mix or inventory timing.
Rows are sorted by largest comparable adjustment first.
| Metric | Model base | Live reported | Variance vs reported | Adjustment size | Why lower / higher? |
|---|---|---|---|---|---|
FCF (TTM) | $9.7B FY2025 model base | $7.8B Live reported TTM | +$1.9B / +24% | Large analyst adjustment | Model base is higher than live reported because the model does not assume the latest cash-flow drag is fully durable. It adjusts for inventory and vendor timing so the cash-conversion base stays conservative. |
Revenue (TTM) | $286.3B FY2025 model base | $275.2B Live reported TTM | +$11.1B / +4% | Close to reported | Model base is higher than live reported because the thesis does not assume the latest reported softness is the durable revenue run-rate. It smooths member traffic and category mix swings instead of extrapolating a single period of unusually strong retail demand. |
Net Cash / (Debt) | $9.0B FY2025 model base | $13.3B Live reported balance sheet | -$4.3B / -2% of revenue | Close to reported | Model base is more conservative than the live reported balance-sheet figure. It reflects membership-model resilience without assuming excess cash is fully distributable. |
Operating Margin | 3.8% FY2025 model base | 3.8% Live reported margin | +0.0 pts | Close to reported | Model base is higher than live reported because the model does not assume the latest reported margin pressure is the durable earnings base. It keeps the base on durable membership-led retail economics rather than temporary mix or shrink improvements. |
Near-term catalysts
Membership fee commentary and renewal trends remain the clearest valuation drivers.
Comparable sales and mix updates matter more than headline retail noise in this setup.
Inventory and vendor timing still shape the free-cash-flow read-through from any strong quarter.
What we are watching
Whether membership renewals and new member additions stay strong enough to justify the premium multiple.
How much recent cash conversion is structural versus timing-related.
Any sign that category mix or a softer consumer backdrop is pressuring the through-cycle base.
| Date | Event | Published rating | Note |
|---|---|---|---|
| Apr 9, 2026 | New | Hold | Started coverage with a Hold view on elite retail quality but a still-demanding valuation. |